Buy to Let or Residential Mortgage

[Midbloke]

Hello,

New member here. I'm about to buy my second investment property. My mortgage advisor has hinted that I should just get a residential mortgage and call it a second home rather than take out a buy to let mortgage.

What are the implications of doing this? I don't see any way that the mortgage provider would ever know providing my mortgage payments are kept up each month.

What have other people done?

Midbloke

[MrWoof]

The chances of being found out are slim.....at the moment..... You are proposing a fraud, how a lender would view that if they found out, I don't know. Be aware also that the Land Registry computers are due to be linked to the Inland Revenue ones at some point, that could lead to some awkward questions, especially if and when you decide to sell.

[Ruth Less]

What have other people done?

Written to the mortgage company telling them the landlord had let the property.

Apart from fraud your proposal puts the tenant in the horrible position of being evicted with little or no notice if you default on the payments and get repossessed.

[Stevie]

I am surprised and shocked that your adviser has recommended this.
You will be in breach of your mortgage contract and generally it can be harder to get a mortgage deal if you have 2 residential properties.
Lenders will also ask you to prove affordability as you have 2 mortgages to run and to them you are residing between the two i.e. not receiving rental.

[Matt Churchill]

Naturally your lender will then look to your income to support both properties, which may cause you problems.

As someone has said, you are effectively committing a fraud, by lieing on a mortgage application. If for any reason the mortgage lender finds out about this they will take a very dim view of it and you could end up in a lot of difficulties, which may have a significant adverse impact on getting finance in the future. You may want to type CIFAS into a search engine. Having been in banking in a previous life, these issues can be tricky little blighters to sort out and don't go away easily.

I am with Stevie, and am very surprised that your advisor has even remotely suggested this. Being economical with the facts is one thing, but, blatantly lieing on an application form for a financial service is never a good thing.

[Midbloke]

Written to the mortgage company telling them the landlord had let the property.

Apart from fraud your proposal puts the tenant in the horrible position of being evicted with little or no notice if you default on the payments and get repossessed.

Why would this scenario be any different when having a BTL mortgage? Do the terms and conditions protect the tennant?

m