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Work Colleague Btl Mortgage

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Hi All,

I have tried to post a new thread here before but it must have been too boring so the mods didnt put it up.

A colleague at work has just had a new baby so she is buying a larger home with her partner. Sounds normal so far. BUT............ as she only works part time and he is self employed they dont have enough documented income to qualify for a mortage for the necessary amount. In the old days I'm sure they would have got a self cert mortgage. They obviously cant get one now so they are getting a BTL mortgage to buy their main family home.

Is this normally done??

Apprently they can do this because the mortgage is done based on the rental amount that could be realised for such a property.

Has anyone else heard of people doing this?

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Hi All,

I have tried to post a new thread here before but it must have been too boring so the mods didnt put it up.

A colleague at work has just had a new baby so she is buying a larger home with her partner. Sounds normal so far. BUT............ as she only works part time and he is self employed they dont have enough documented income to qualify for a mortage for the necessary amount. In the old days I'm sure they would have got a self cert mortgage. They obviously cant get one now so they are getting a BTL mortgage to buy their main family home.

Is this normally done??

Apprently they can do this because the mortgage is done based on the rental amount that could be realised for such a property.

Has anyone else heard of people doing this?

Yes, I have. But if they actually intend to live in it themselves from the start and say nothing to the lender, then it is a mortgage fraud. If they let it at first, but then move in themselves, they need to tell the lender. They could probably do this by letting the new one for 6 months, then letting their current one and moving to the larger one, informing the lenders of each. They are then still pretending that this was not their inital intention. Any mortgage broker with a view on this scenario?

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They have no intention of letting the property. They are selling the current flat and using the equity as a deposit for this new home.

They can only get this new home if the obtain a BTL mortgage as the criteria are different. I think the mortgage broker must know the situation.

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They have no intention of letting the property. They are selling the current flat and using the equity as a deposit for this new home.

They can only get this new home if the obtain a BTL mortgage as the criteria are different. I think the mortgage broker must know the situation.

Then that is a mortgage fraud. They and the broker must both know that!! Doubt if they will be the only ones. Best to sell and go renting if you ask me. there will a much better deal in future if they are more patient. They may well be in negatve equity in two or 3 years time if they buy now depending on the LTV.

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Just out of interest then could you legitimately set up a limited company and buy a property in the company name, then install yourself as a tenant?

Yes, but you would end up paying a lot of tax for no good reason. Limited companies are not tax efficient for buy to let properties anyway.

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Yes, but you would end up paying a lot of tax for no good reason. Limited companies are not tax efficient for buy to let properties anyway.

Not now but it was common in the 1970s and 1980s. I remember in the early 90s bust that loads of people lost their homes when their companies went bust because the home was 'owned' by the business.

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Just out of interest then could you legitimately set up a limited company and buy a property in the company name, then install yourself as a tenant?

Yes, except most (all?) BTL lenders require confirmation that the tenant(s) will not be members of the directors/shareholders family.

Usually not a good option tax-wise.

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It gets worse

I was talking to her about her new purchase (£280k for a grotty end terrace in Bucks) and asked why she didn't want to pocket the equity and rent for a year or so bearing in mind the emergency budget etc.

The response was typical "because renting is dead money, paying someone elses mortgage etc etc blah blah blah,

This is the worst bit..........................she then says she is getting an interest only mortgage :o:o:o

I've given up taling about it now. I'm sure the people in the office think I'm just jealous because I can't afford a house :lol:

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The mortgage fraud will allow the lender to posses the property instantly should they so wish. Your colleague's actions are reckless to the point of stupid IMO. There comes a point at which it is counter-productive to point out how foolish people are - you appear to have reached that point.

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  • 152 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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