Getting caught with the wrong mortgage

G_M

Cactus25 wrote: »

So basically what im taking from this is, so long as everything is going hunky dory for all parties, my friends have nothing to worry about. The moment things turn sour the likelihood of things going very sour is significant.
Just like when I speed on the motorway. No camears? No police? All hunky dory.


Realistically I'm never going to ask them about their financial affairs, its not the done thing is it. However I'm curious as to how they would approach their mortgage lender given this has been going on for years.
'Sorry guv - just realised I should have applied for a BTL mortgage. Can I have one please?" or apply for a BTL mortgage with another lender and switch.



Anyone have any experience of switching from a FTB mortgage to a BTL mortgage? Lots of people.

Presumably one would just keep quite to the facts and disclose as little as possible when speaking to them without being deceitful. Or have I got it wrong, is switching to a BTL mortgage simply a phone call away assuming you stay with the same provider.

Some lenders offer BTL mortgages, some don't.


Some will grant Consent To Let on the existing residential mortgage. Some won't.

lisyloo

The fact that you suspect them of wrong doing and do nothing paint you in a bad light

You have to be pretty sure before you report people.
For example there's some people smoking funny smelling stuff on my social housing block. They may be smoking illegal drugs but how would I know? I'm going to look an idiot if I report them and they are vaping vanilla and strawberry and also possibly waste valuable police time.


Sounds like the OP has no idea about these people's affairs.

sevenhills

hazyjo wrote: »

From G_M's guide:
Tax
You're running a business, even if it's a short term arrangement or rental to family, so you have to declare rental income whether tax is payable or not. Research the Income Tax liability and allowances before you start. Note only the interest element of your mortgage repayments is tax-deductable (see below). Consider Capital Gains Tax. If going abroad, & you have no agent, read the Non Resident Landlord Scheme - see below.

The tax exemption is automatic if you earn less than the threshold. This means you don’t need to do anything.


https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme

sevenhills

Comms69 wrote: »

Think you're confused. That rent a room.

Yes, my error.

jonnygee2

I know one of them is a completely informal arrangement.

There is no such thing as an 'informal' tenancy. They may think it's an informal arrangement, but actually the tenant will have a whole host of legal rights. And there is always a contract between the landlord and the tenant, whether or not there is a written tenancy agreement.

G_M

sevenhills wrote: »

The tax exemption is automatic if you earn less than the threshold. This means you don’t need to do anything.


https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme

You're still confused!

The Rent a Room Scheme is not the same as the Non Resident Landlord Scheme.

FBaby

So your wife is working and not declaring her income. Now you want to get a house to rent out but don't want to get a BTL, which might very well be because you couldn't get one since you can't include her earning. So you are asking if you can get a residential mortgage, rent the house out, get the income and not declare it and hoping that just like your wife you never get caught.

If it was just a simple case of asking total strangers on a forum and then be covered...

Crashy_Time

lisyloo wrote: »

You have to be pretty sure before you report people.
For example there's some people smoking funny smelling stuff on my social housing block. They may be smoking illegal drugs but how would I know? I'm going to look an idiot if I report them and they are vaping vanilla and strawberry and also possibly waste valuable police time.


Sounds like the OP has no idea about these people's affairs.

Police and HMRC probably get hundreds of calls a week that are just nonsense, do they investigate all of them, who knows? HMRC have obviously decided that BTL/Rent a Room etc. is now on the tax radar, but they won`t be able to find out about everyone doing a bit of cash in hand, will they?

tlc678910

Hi,
I rent out the house we used to live in. I have consent to let and do a tax return. Some people may assume I don't like you assume of your friends.

I think the biggest concern if you rent out without permission would be if your landlord insurance investigated and said it voids your policy when you tried to claim. Your house could have burned down, you would still owe the mortgage if you have one, and no house. If you didn't bother to get landlord insurance the same applies - no pay out and still owing the mortgage could cripple your finances.

Tlc

Crashy_Time

https://www.property118.com/hmo-camden-council-sending-letters-mortgage-provider/