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AIBU?

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Original poster

To fake employment contract to borrow more mortgage

108 replies

Wouldyoudothis · 26/07/2017 20:51

Name changed for this and know I will probably get flamed. Anyway, we have a mortgage, easily affordable, very small house. I've had twins so not going back to work anytime soon, especially as one is quite unwell still. My parents own a decent company. We are desperate to move to a bigger home but now on one salary can't get an increase, despite very easily being able to pay double what we pay now (more than enough for the increase we need). The lender has said I simply need an employment contract with a start date to be able to borrow the extra money. Aibu to be tempted to ask my parents to just write me a contract? Thanks!

OP posts:
Mummyoflittledragon · 26/07/2017 22:32

You can afford it right now because interest rates are so ridiculously low. I remember mortgage interest rates of double figures in the 1980's just before the crash and houses were being repossessed at an alarming rate. Interest rates on mortgages were around 6/7% in the noughties just before the 2008 crash. We are going into a period of extreme uncertainty with Brexit and it is unclear what will happen with the economy. PUT THIS OUT OF YOUR MIND YOU CANNOT AFFORD THIS.

NoSquirrels · 26/07/2017 22:36

Understand you're not going to do it - which is a good decision.

If you can afford £850 mortgage payments now, though, then get on with overpaying whilst interest rates are low, and then you'll have more equity to play with when you do decide to move.

Make sure you have looked properly at pension provisions, and at increasing life insurance if need be now that you have more dependants.

Justaboy · 26/07/2017 22:37

There is nothing in company law to prevent or stop your parent's employing you in their company and they can pay you what they like , you can be employed to do whatever job the they see fit for you to do.

If its all their company they can appoint you a director if they so see fit too.

Whisky2014 · 26/07/2017 22:46

Stop making split second decisions over lifetime consequences.

Floggingmolly · 26/07/2017 22:47

If the mortgage is well within comfortable affordability, how come they're not so keen to lend it to you without evidence of further earning capacity?

LaurieFairyCake · 26/07/2017 22:53

Mortgage lenders are really cautious now. We got a new mortgage this year and we had to put a much bigger deposit down than we wanted - over 30%.

And our mortgage payments are less than a quarter of our monthly income (with no childcare/car payments/loan payments/credit cards)

They are just really cautious now.

gillybeanz · 26/07/2017 23:01

My ds1 is a broker and whilst I am not I was with him and helped to test him on his knowledge when taking emap?

OP, you really need to educate yourself about mortgages, if you are to apply for one soon. You seem to know so little, it's scary.

PersianCatLady · 26/07/2017 23:02

You seem to know so little, it's scary
That was my first thought too!!

kittytom · 26/07/2017 23:13

Aside from documents I was asked loads of detail about my income/spending/childcare/how many coffees I buy in costa when we applied for our mortgage. As a pp said it is the sort of detail you can only answer if you are telling the truth. Plus, mortgage fraud/prison etc.

SantasLittleMonkeyButler · 26/07/2017 23:15

Our combined monthly income is around the same as yours OP - £2.5k.

We currently pay £500 per month & still don't really have spare money at the end of the month! Like others have said, £850 may be manageable for you now but it wouldn't take that much of an interest rate rise to see your repayments much nearer £1000 per month or even more.

Also children become much more expensive the older they get! Mine are now 19, 16 & 6. Believe me I've learnt this the hard way Wink.

In 5 years' time I think you'll be glad you didn't overstretch yourselves now.

kittytom · 26/07/2017 23:15

Ps glad you aren't doing it Halo

requestingsunshine · 26/07/2017 23:59

It's hard enough climbing the property ladder as it is and if they only want a contract and you can afford it why not. A mortgage of £850 on that income is very manageable. I'm on way less than that and my rent is £1060. We manage. Me and 4 kids. It's mad because if I could get a mortgage the monthly payments would be less, but I'm self employed and haven't got 3 years accounts yet.

gillybeanz · 27/07/2017 00:24

I know the OP isn't doing this now, but if anybody thinks this is a good idea, please educate yourselves.
I'm not clever or bright or particularly intelligent, so it isn't difficult to understand.
We too started out on much higher interest rates, the struggle was unbelievable.
I lost count of the friends who lost their homes, family members too. Sad.

Flatpackback · 27/07/2017 00:35

Can your parents loan you the extra? If they have funds available they could set up a private mortgage through a solicitor so they retain a charge on the property just like with a building society. When the property is sold any outstanding loan automatically gets repaid to them.

BadLad · 27/07/2017 00:45

Is this you?

To fake employment contract to borrow more mortgage
WannaBeDelgadaToFitInToMyPrada · 27/07/2017 09:56

Gillybeanz, I think that the stress test is pretty flawed, they don't ask borrowers if they smoke for example.

Sometimes the questions they ask aren't the relevant ones and if people with common sense know that and decide to work around it a little then don't forget that the bank aren't doing you a favour. Borrowers are doing the banks a favour.

MrTrebus · 27/07/2017 10:25

@requestingsunshine

You only need 2 years accounts, sometimes 1 year. Speak to a broker.

MadMags · 27/07/2017 11:16

Can your parents employ you in any capacity, to work from home?

Tryingtobeanonymous · 27/07/2017 15:49

You don't need to fake it. Can't your parents actually employ you? Work from home? Or their house? You don't say what their business is but surely there's a legitimate opportunity if they want to help you buy this house? Even if its cleaning, or proofreading something for them?

ginnybag · 27/07/2017 16:30

My household income is about that. My Mortgage is around the £600 mark. I wouldn't even consider remortgaging to anything like £850.00

Do not underestimate how much more expensive those children are going to get

PersianCatLady · 27/07/2017 16:49

Do not underestimate how much more expensive those children are going to get
When you have just had a baby, a lot of the things that they need have already been bought and a lot of people are given enough clothes to last for baby's first year.

It is only in the second year that you start to realise just how expensive it is to have a child.

That was my experience anyway.

Floggingmolly · 27/07/2017 18:01

I don't believe understand the broker telling op she just has to have proof of upcoming employment, without any reference to earnings.
If they're reluctant to lend on her DH's salary alone; a 15 hours a week cleaning job at minimum wage would hardly make them a better prospect??

UserThenLotsOfNumbers · 27/07/2017 18:04

No please don't do this. It's mortgage fraud and it will come back to bite you on the bottom later if not sooner.

Disn3yN3rd · 27/07/2017 18:54

This is slightly different to OP but my mil admitted to us that she had "altered" FILs income so they could get a better mortgage. Would this be classed as mortgage fraud?

Floggingmolly · 27/07/2017 18:59

Yes, of course it would. How did she manage to do that? It's an offence to alter a P60!