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AIBU?

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Original poster

DP’s mum’s advice

20 replies

qwertyuiop098 · 07/10/2020 18:32

DP’s mum is generously helping him to purchase a home. It is intended as an investment and will be let out to paying tenants.

She has said it should be a residential mortgage because then the minimum deposit will be lower, however I am very worried about this because, as we don’t intend to live in it and in fact, rent elsewhere, it is mortgage fraud.

His mum has advised him that so as not to appear obvious to the lender, he should change his driving license and electoral role to the address of the property.

This worries me even further as lying on both of those is also a criminal offence. He seems to think this is a viable option and I’m getting to the point where I don’t know what to do.

Can anyone give me an idea of how risky this truly is?

OP posts:
BumBurnerBum · 07/10/2020 18:35

No idea OP but it would make me very nervous.

Gazelda · 07/10/2020 18:37

Surely his solicitor will clock that he is taking out a residential mortgage rather than a buy-to-let?
And he'll need appropriate insurance.

And what about council tax?

There are too many ways this could get uncovered.

gobbynorthernbird · 07/10/2020 18:37

And what happens when the tenants add themselves on, and take him off, the electoral register? Put utilities and council tax in their names?

LIZS · 07/10/2020 18:38

It is not a home if he does not intend to live in it. What is the arrangement re. Rental income, capital gains, ll liability etc? How longstanding a partner is he?

pigsDOfly · 07/10/2020 18:48

He needs to stop listening to his mother and find out for himself what is involved in buying a property to let out, and his responsibilities as a landlord.

She's not giving him good advice.

At some point in the future the mortgage is going to have to be renewed. If he does what she's suggesting what's going to happen if he wants to change the mortgage provider and he can't produce all the relevant documents with the correct home address.

Mortgage companies aren't stupid.

Freddiefox · 07/10/2020 18:51

Your dh is an adult. Is he not able to realise that it’s not a great idea. Just because he’s mum says something he doesn’t have to do it. Surely he knows the risks.

How long have you been with him? I’d question his integrity.

jessstan1 · 07/10/2020 18:52

I don't see how that will make much difference. People sometimes buy a place intending to live there but circumstances change and they let it. What's the difference?

pigsDOfly · 07/10/2020 18:57

@jessstan1

I don't see how that will make much difference. People sometimes buy a place intending to live there but circumstances change and they let it. What's the difference?
Yes they do, but when they let it instead of living in it they are supposed to change their residential mortgage to a BTL mortgage.
Rockchick1984 · 07/10/2020 19:11

If you don't own another property, some lenders will allow you a residential mortgage with permission to let it out however you need to be upfront with them about it.

HandfulofDust · 07/10/2020 19:13

I know people who have moved out of their home and let it out without telling their mortgage lender but it seems dodgy, especially if he's never going to live there. I wouldn't be comfortable with it.

hula008 · 07/10/2020 19:14

You can also ask permission from the lender

hula008 · 07/10/2020 19:14

Yes they do, but when they let it instead of living in it they are supposed to change their residential mortgage to a BTL mortgage.

You can also ask permission from the lender

FinallyHere · 07/10/2020 19:19

but circumstances change and they let it. What's the difference?

Well, they would need to contact the mortgage provider, insurance and everything, and make any changes required for the change in circumstance .

His mother is giving really bad advice.

avidteadrinker · 07/10/2020 19:20

When I moved out of my flat and rented it to tenants, I told the mortgage company and they kept my residential mortgage as it was. in fact when I remortgaged, they still kept me on a residential mortgage
It’s best to be upfront

tealandteal · 07/10/2020 19:22

We had to provide proof of home insurance as part of our mortgage. Normal home insurance won't cover you if the damage/claim is caused by a tenant.

DuckbilledSplatterPuff · 07/10/2020 19:57

Is your MIL a mortgage advisor?
It sounds like a Trump Tax Dodge move.
Changing your driving licence home address etc are just the start of it. How much money could you be fined for lying on the mortgage form and the insurance form and how will this could affect your future borrowing, credit cards or insurance claims on the property you do live in. What if the tenants have a fire? What happens when you want a better rate? How would you separate the insurance for this house with the one you live in? What happens at probate if one of you God Forbid, dies? What if one of you applies for a job at a company that does background checks as more of them do.
Its fraud and there are so many unforeseen ways that you could be found out.
Its not the 1980s. Everything is computerised now and its simple to cross reference these things.

OoohTheStatsDontLie · 07/10/2020 20:02

If there is a serious loss in the house and it turns out he lied on he insurance then they won't pay out. He would effectively be uninsured. I don't know about the mortgage stuff though

DuckbilledSplatterPuff · 07/10/2020 20:24

Also. What if you needed to evict the tenants? What if there is a burglary and the police are involved. How would you organise council tax etc.

maddiemookins16mum · 07/10/2020 20:36

Hmmm, I also foresee no tax return filled in for the rental income either

HerkyBaby · 07/10/2020 20:37

This would be fraud.

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