Do I really need a buy to let mortgage?

JimJohn_2

I'm currently living in a flat with my wife and in June she's getting a job which comes with a house.
Our mortgage deal is on the point of running out and everybody is saying we need a buy to let mortgage. However, we are not dependent on rental income to pay the mortgage; does that not count for anything? I fail to see the relevance of whether or not I have tenants as long as I'm properly insured.
Can somebody please enlighten me! Cheers.

Doozergirl

If you have tenants then you should have permission to let from your lender. You don't need to change your mortgage and if your outgoings are not increasing with another mortgage, then I should think they would be accommodating.

brit1234

Willingly deceiving the mortgage lender of using a residential mortgage for buy to let is an offence. If you want to commit mortgage fraud then you are liable for arrest. The government has finally taken notice and its prosecutions are well up.

Its not worth it.

poppy10_2

brit1234 wrote: »

you are liable for arrest.

That's nonsense, but you do need to let your lender know.

Bungarm2001

It's just a simple matter of letting the lender know your intentions and taking it from there.

Unless you are VERY unlucky and get a real jerk on the other end of the phone, there should be no problems. Mortgage lenders know full well that circumstances change and people want to move but not sell, so they are used to this kind of scenario.

Definitely look into the insurance details tho...

TTMCMschine

poppy10 wrote: »

That's nonsense, but you do need to let your lender know.

Quite right, I commit fraud all of the time & I've never had a problem with "being arrested."


Pah, some people! :rolleyes:

neverdespairgirl

poppy10 wrote: »

That's nonsense, but you do need to let your lender know.

Not necessarily nonsense.

If you take out a new mortgage deal, intending to rent it out but telling the lender that you will live in it, and thereby gain a lower rate / better deal, that could well be gaining a pecuniary advantage by deception.

brit1234

poppy10 wrote: »

That's nonsense, but you do need to let your lender know.

Gaining a pecuniary advantage was the old legislation its been replaced by the Fraud Act 2006. It is an arrestable offense and the original poster covers all the points to prove if he intentional lies to the mortgage company about the type of mortgage. Lets say I know a little on the subject.:D

Here is the offense under the new act.


Fraud by failing to disclose information

A person is in breach of this section if he—
(a) dishonestly fails to disclose to another person information which he is under a legal duty to disclose, and
(b) intends, by failing to disclose the information—
(i) to make a gain for himself or another, or
(ii) to cause loss to another or to expose another to a risk of loss.


http://www.opsi.gov.uk/Acts/acts2006/ukpga_20060035_en_1#pb1-l1g2

JimJohn_2

Thanks everyone.

The last thing I'd want to do is commit fraud, hence this thread.

On the other hand, as we've no other mortgage, I still fail to see the relevance of whether we've got tenants as long as we pay the mortgage and get suitable insurance. Never mind, the lenders make up the rules, not the likes of me!

hearts

brit1234 wrote: »

Willingly deceiving the mortgage lender of using a residential mortgage for buy to let is an offence. If you want to commit mortgage fraud then you are liable for arrest. The government has finally taken notice and its prosecutions are well up.

Its not worth it.

Fair comment.........erm could you point me to evidence of even one of these "prosecutions that are well up"
Remembering to keep it in the context of the OPs position.

Thank you ;-)

brit1234

Just type in mortgage fraud on the FSA site and you will see the clamp down they are doing with the CML. They are now dealing with both in false mortgage types but also use of gift deposits (newbuilds). Lots of examples in local press as well as well as Panorama a couple months back about the FSA stepping up a gear (a bit of closinfg the gate after the horse has bolted. As for the police it is a very simple arrest and a lot easier to charge compared with the old legislation.

The lenders are increasingly willing to act as it puts them in greater financial risk especially as they are trying to reduce their losses.