changing mortgage - how deep will they dig?

[nogginthenog]

A mate of mine has a flat that was his primary residence. When he got married & moved into his wife's house he let his property through an agent, and it has been rented ever since, he never bothered with a more expensive BTL mortgage, or a 'permission to let' . I did tell him this could be unwise, but he didn't want to stir up a hornets nest by asking his Building Soc incase they upped his rate. Now his mortgage is coming to an end, but they have offered him a similar product and he can apply over the phone, no revaluation, no fee's etc. I have suggested they might look into things like the electoral register, or ask for council tax bills, this has got him worried!

Is this likely to happen, or is he likely to get away with low interest rates for another 7 years or so??

[nogginthenog]

Thanks. I was beginning to think there was nobody here today!

[Soovy]

nogginthenog said:

A mate of mine has a flat that was his primary residence. When he got married & moved into his wife's house he let his property through an agent, and it has been rented ever since, he never bothered with a more expensive BTL mortgage, or a 'permission to let' . I did tell him this could be unwise, but he didn't want to stir up a hornets nest by asking his Building Soc incase they upped his rate. Now his mortgage is coming to an end, but they have offered him a similar product and he can apply over the phone, no revaluation, no fee's etc. I have suggested they might look into things like the electoral register, or ask for council tax bills, this has got him worried!

Is this likely to happen, or is he likely to get away with low interest rates for another 7 years or so??

Oh dear.


He will be asked to repaper the deal - i.e. do new forms.

Is he going to confess or commit fraud again?





Twat.

Edited by Soovy on Tuesday 22 December 15:58

[Road Pest]

It is mortgage fraud. It depends on the lender how deep they will dig, where does his post go? (or should I say your post go?)

[nogginthenog]

I'm the gullible one who took out a proper BTL mortgage for my BTL property, paying a higher rate to the bank for... well, for what? He's maybe got more bottle than me, and has benefited from much lower rates for many years.

[Soovy]

nogginthenog said:

I'm the gullible one who took out a proper BTL mortgage for my BTL property, paying a higher rate to the bank for... well, for what? He's maybe got more bottle than me, and has benefited from much lower rates for many years.

And soon enough he'll benefit from having his facility withdrawn and having to hand his house back.

Well done you. Your mate, however, if a cocksocket.

[Road Pest]

Your rate may not be so high if some people with rented properties weren't committing mortgage fraud.

[Silver993tt]

It's fraud and they will be able to go back years after the mortgage is finished and discover that. In the current economy and for quite a few years to come, financial institutions will be looking at any way to recover their costs and boost their revenues/profits, particularly through fraudulent actions by mortgage/load applicants.

You might also find that insurance cover on the property is also invalidated by this. What if there is a fire and someone gets killed in the apartment?

Edited by Silver993tt on Tuesday 22 December 17:24

[Road Pest]

Insurance will almost certainly be invalidated, plus there may be a company that owns the Freehold.

[nogginthenog]

Cheers guys - I will be sure to pass on your concerns to the man in question!

The insurance issue makes me wonder the following ; in my case I am one of 4 landlords that own the freehold of a house converted into 4 flats. We each own 1 of these flats, but insure the building between us, paying equal quarters. My own flat is financed with a BTL mortgage and as far as I know so are the other 3. BUT - if one of the other landlords still had his old 'residential' mortgage ( we all used to live there, but moved on to pastures new ) would that invalidate the buildings and public liability insurance? I feel a landlords meeting coming on....

[Soovy]

nogginthenog said:

Cheers guys - I will be sure to pass on your concerns to the man in question!

The insurance issue makes me wonder the following ; in my case I am one of 4 landlords that own the freehold of a house converted into 4 flats. We each own 1 of these flats, but insure the building between us, paying equal quarters. My own flat is financed with a BTL mortgage and as far as I know so are the other 3. BUT - if one of the other landlords still had his old 'residential' mortgage ( we all used to live there, but moved on to pastures new ) would that invalidate the buildings and public liability insurance? I feel a landlords meeting coming on....

Yes of course it does!!

Insurance for tenants is much more expensive that for homeowners.


If someone is winging it then the building are NOT insured.

[Silver993tt]

Surely getting the right level of insurance/mortgage cover won't cost any more any way in real terms will it? These costs can be offset against the income tax that is due on rental income. Effectvely it becomes a business expense, so why not do things properly/legally since it won't cost any more anyway?

[scotal]

nogginthenog said:

Cheers guys - I will be sure to pass on your concerns to the man in question!

The insurance issue makes me wonder the following ; in my case I am one of 4 landlords that own the freehold of a house converted into 4 flats. We each own 1 of these flats, but insure the building between us, paying equal quarters. My own flat is financed with a BTL mortgage and as far as I know so are the other 3. BUT - if one of the other landlords still had his old 'residential' mortgage ( we all used to live there, but moved on to pastures new ) would that invalidate the buildings and public liability insurance? I feel a landlords meeting coming on....

If you have a block buildings policy it may or may not cover any of the flats for rental purposes.
You need to go back to your broker and check. If the policy does not cover lets, it will be invalid irrespective of the mortgage on the flat.
If the policy does have lettings cover then the mortgage situation should not be a problem.

[nogginthenog]

scotal said:

nogginthenog said:

Cheers guys - I will be sure to pass on your concerns to the man in question!

The insurance issue makes me wonder the following ; in my case I am one of 4 landlords that own the freehold of a house converted into 4 flats. We each own 1 of these flats, but insure the building between us, paying equal quarters. My own flat is financed with a BTL mortgage and as far as I know so are the other 3. BUT - if one of the other landlords still had his old 'residential' mortgage ( we all used to live there, but moved on to pastures new ) would that invalidate the buildings and public liability insurance? I feel a landlords meeting coming on....

If you have a block buildings policy it may or may not cover any of the flats for rental purposes.
You need to go back to your broker and check. If the policy does not cover lets, it will be invalid irrespective of the mortgage on the flat.
If the policy does have lettings cover then the mortgage situation should not be a problem.

the buildings insurance is specifically for rented properties - I take care of that otherwise it wouldn't get done on time

Now it seems I need to ensure the other landlords are on proper BTL mortgage deals, though I have no reason to suspect they don't.

Cheers all - happy Christmas

[emicen]

Soovy said:

nogginthenog said:

I'm the gullible one who took out a proper BTL mortgage for my BTL property, paying a higher rate to the bank for... well, for what? He's maybe got more bottle than me, and has benefited from much lower rates for many years.

And soon enough he'll benefit from having his facility withdrawn and having to hand his house back.

Well done you. Your mate, however, if a cocksocket.

Are you honestly suggesting in the current finance climate, a mortgage company would take an account with no history of missed payments or arrears (fairly safe assumption given they were willing to offer a new product with only a phone call to get details) and force an issue out of it to the extent of having to deal with the hassle and cost of a repossession?

I dont doubt for a second the terms of contract say they could, but who actually would?

[scotal]

nogginthenog said:

Now it seems I need to ensure the other landlords are on proper BTL mortgage deals, though I have no reason to suspect they don't.

Has your insurnce co told you this? Have they asked to see details of either PTL or BTL mortgages?

If not then they'd be quite within their rights to tell you to poke it if you go asking about their finances. Friendly warning.