What will happen if I move back into my house which has a Buy to Let mortgage

[HowlingGale]

Hi, does anyone know what would happen if I moved back into my house which is currently let out to tenants? My circumstances have changed, and ideally I'd like to move back in, but the house has a buy to let mortgage on it. I know that I would be in breach of the mortgage terms if i did, but can anyone advise:

1. what is the likelihood of getting found out and
2. what would be the repercussions if I did?

I presume that the lender would either want me to repay the mortgage or make me move out and rent it again, but does anyone have any experience of a similar situation?

I have talked to my lender about this and they say that I would need to switch to a residential mortgage, but the interest rates are now so high i can't afford to switch from the BTL mortgage! Any advice welcome.

Honestly - they are unlikely to ever know.

How would they know?

You might need different buildings insurance too but as pp said, realistically, who will find out

Don't tell anyone.

How would they find out?

Well they might ask to See a tenancy agreement? or check the council tax records? I don't really know but am just a bit worried about doing it as I don;t want to end up with a criminal record for fraud!! or even worse, a prison sentence!

Why can’t you change it to a residential mortgage?

Can you give it to an estate agent and they lend it to you? I have no knowledge of mortgages, but that is an idea that popped into my head.

Because it would cost money to do that

Has the OP spoken to the mortgage company? Or a broker? I changed one of mine from residential to BTLand bit didn’t cost me anything.

I would ask a separate mortgage broker for advice - and maybe do not tell them which is the bank - that way there is no risk of them tipping off the relevant bank in case there is an issue.

But, my understanding is that owner-occupation is lower risk for the lender and that BTL mortgages usually carry a higher interest rate, so it may be no problem at all, and then you could just stop worrying about it.

Short answer, no you can’t, because you’d be in breach of the mortgage terms.

Some useful info here
www.rw-invest.com/buy-to-let-property/can-investors-live-in-their-buy-to-let-property/

Besides, if it’s on a BTL mortgage, don’t you have tenants living in it?!

Nightmare: I know I'd be in breach of the mortgage terms but was wanting to try and establish whether or not it was likely I'd get found out and if so, what the repurcussions would be. And yes, I do have tenants in it, but they are in the process of buying somewhere themselves, so I would ideally like to move back in. I have spoken to my existing lender, and they have said I can switch to a residential mortgage but the problem is that the interest rate is now much higher than the fixed BTL loan I'm currently on.

This is a really bad idea. There is a register called the Hunter Register which consists of people who have fraudulently obtained mortgages, breached mortgage conditions etc. If you end up on the register you will never get another mortgage loan.

The likelihood of the mortgage company finding out is high. They do make random checks from time to time. It is very straightforward for a mortgage lender to check your credit rating and this will flag up your address.

When does your current BTL mortgage deal end?

I've been advised it is highly unlikely there will be issues. Providing you make your mortgage payments on-time, I wouldn't worry. Obviously, long term it may become riskier so probably not sensible to do for longer than strictly necessary.

...May or may not be speaking from current experience.

I can't believe people on here are saying committing fraud is OK.

Well they aren’t the ones who would face the consequences if caught so it’s pretty easy to tell OP it would be fine

I would just do it.

Firstly, they're extremely unlikely to find out.

If they did and wanted to make an issue of it, I would kick up a tremendous fuss and complain, inventing a phone call I'd had with a representative on x date who told me it was allowed as long as I intended to let in future/it was for a period of x or under - invent your lie. I'd then move out immediately and re-let it.

If you are caught, they're very unlikely to go immediately down the fraud or default route - far likelier to give you x time to comply with the terms ime.

Just keep your finances as good as possible and be as prepared as possible to exit quickly if you're found out.

I have several BTL mortgages. The lender has never asked who actually lives in the property. In your circumstances I’d be tempted to move in but only temporarily with a view to either selling and using the equity to buy another property or finding a suitable rental

It's against your mortgage terms but it's hardly immoral on the fraud front. You pay more for a btl mortgage for a start. If say do it but with a plan to get to residential as soon as your fix comes to an end. No one checks. I can tell you that first hand.

My friend was raped three years ago. She is still waiting for a court date with evidence beyound doubt so don't fool yourself that people chase up or give a crap about a mortgage being paid on time. If they found out your mortgage would be withdrawn that's all. But they won't find out.

Can't you?

if mortgage rates hadn't just shot through the roof this wouldn't be an
issue as switching to a residential mortgage would be cheaper, not more expensive. Living in your own house is better for the bank, which is why BTL is more expensive. The only reason it's more expensive for the OP to go on a residential mortgage is the suddenly inflated interest rates.

@howlinggale

Given BTL is more expensive than residential mortgages due to them being riskier for the bank and only more expensive for you now because of the jump
in interest rates, I'd just do it. You're creating more security for the banks money, not less. Moving back into your house, you're still paying more than if you'd got a residential mortgage at the time, so the bank is still benefitting.

I'd just do it, I wouldn't do it the other way around.

So you are suggesting not just committing fraud, but also that op perjure herself.

There's a reason the Hunter register exists and it's for people like you. Dreadful.

Whether these people advising OP to lie, commit fraud etc are morally wrong or not the point is that they can blithely make these suggestions in the full knowledge that they can never come back to bite THEM on the bum!

Thanks for all your comments and advice. I will have a long think about what to do next! Not sure I could live with the uncertainty and nagging worry of being found out.......