Mortgage fraud, what will they do?
JohnnyDancer
Posts: 18 Forumite
I own the upstairs flat in an old house & I share the freehold with the downstairs flat. I found myself no longer able to pay the mortgage 3 years ago so I have moved out and rented my flat without informing my mortgage company. After the first year, I switched mortgage provider and now have a new residential mortgage with them. They believe I live at the address. I have been told that although this is mortgage fraud they are unlikely to come down on me very hard and could be sympathetic to my situation (I have alcohol issues and mental issues). Does any one know what they are likely to do if they find out what I am doing? The people downstairs believe that I have a Buy To Let Mortgage and so do the tenants.
Any advice welcome
Any advice welcome
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Comments
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Worst case I can imagine is them calling in the loan.
You can expect to be charged a higher rate, a fee or maybe even both for consent to let, if the lender is minded to allow it.
Who has been bandying around words like 'mortgage fraud?'I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Does any one know what they are likely to do if they find out what I am doing?
Options can vary.
If they consent to allow you to let the property, they will likely take no action although your interest rate may change to match their buy to let product.
If they dont consent to let, they will give you a short period to change lender.
Under money laundering guidelines, they should report you to HMRC as you could well be doing tax evasion as well.
Worst case is they go for repossession and place you on the mortgage fraud register (and if you haven't declared income, HMRC will then be after you as well).
If you were living in it when you got the mortgage and let it out later, they will be more considerate. That is not fraud. If you bought the mortgage after it was already let out and lied on the application they will likely take the stronger approachI am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
kingstreet wrote: »Worst case I can imagine is them calling in the loan.
You can expect to be charged a higher rate, a fee or maybe even both for consent to let, if the lender is minded to allow it.
Who has been bandying around words like 'mortgage fraud?'
Thanks for the reply, the mortgage fraud word I just picked up from the internet, I'm pretty new at this.0 -
Thanks for the reply. When I applied for my current mortgage 18 months ago I had already been renting the property out for a year.Options can vary.
If they consent to allow you to let the property, they will likely take no action although your interest rate may change to match their buy to let product.
If they dont consent to let, they will give you a short period to change lender.
Under money laundering guidelines, they should report you to HMRC as you could well be doing tax evasion as well.
Worst case is they go for repossession and place you on the mortgage fraud register (and if you haven't declared income, HMRC will then be after you as well).
If you were living in it when you got the mortgage and let it out later, they will be more considerate. That is not fraud. If you bought the mortgage after it was already let out and lied on the application they will likely take the stronger approach0 -
The lender that I am currently with website says it will not consider buy-to-let if the freehold is shared.0
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Are you declaring your rental income for tax purposes?
Where are you registered on the electoral roll?0 -
JohnnyDancer wrote: »Thanks for the reply. When I applied for my current mortgage 18 months ago I had already been renting the property out for a year.
In which case, that is likely to be mortgage fraud as you would have been asked in the application whether it is for your primary residence.
You would also been required to declare your income. So, was the rental income included?
Do you declare your rental income to HMRC?
A get out is to remortgage it now to a buy to let mortgage and avoid any issues by putting it right now.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
No I don't declare my rental income to HMRC, do you know what would they do?In which case, that is likely to be mortgage fraud as you would have been asked in the application whether it is for your primary residence.
You would also been required to declare your income. So, was the rental income included?
Do you declare your rental income to HMRC?
A get out is to remortgage it now to a buy to let mortgage and avoid any issues by putting it right now.0 -
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Can you stop renting it out and move back into it?0
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