Been living in my own BTL...

[eshjie]

I have only just realized the pickle I have got myself into. And would like some advice.

In Jan/Feb 2021 I split up with my long term partner and moved out. My flat (which I lived in originally) which was previously let out to a tennant was empty and so I moved back in as I had nowhere else to go.

I am not an experienced landlord, the BTL mortgage on my property had been running 1 of the 2yr fixed term (previously I had consent to let, tennant was here 2 years).
I moved back in without considering any of the mortgagee implications. I was stressed from the breakup, stressed from covid lockdown and I just didn't have the mind to fully consider it.

Fast forward to now where I'm better and starting to think about next year's remortgage, I realise how I am in total breach of my mortgage terms and conditions, and have been since Feb.

I read online that they may immediately make me pay back the outstanding balance or repossess the property...that's scary.

So the question I have now is what the hell do I do. Do I call them up in the morning and explain the situation and hope they are merciful.

Do I quickly get another (residential this time) mortgage sorted out and get out of this BTL one early and hope they don't put 2 and 2 together?

Anyone got any experience with this and how the mortgage provider (TSB) are likely to react? Thankyou in advance.

[theartfullodger]

They may well already know from the "hunter" system. Strongly suggest you do what we'd all like all agents & tenants to do.Be honest, 'fess up.

I'm confident they have the right to repo , more dangerous you might find yourself blacklisted on hunter system and find any remortgage, mortgage , loan or credit agreement will be either impossible or expensive.

Google hunter mortgage fraud.

Good luck, hope things continue to improve.

Fwiw I've lived in properties similarly with BTL mortgage. But if found out I could afford to pay them off and at almost 74 doubt I'll ever need another mortgage.

Btw only 2 n's in tenant.

[eshjie]

Thanks for the reply. Yeah this sounds like the right thing to do.

Thankfully I have enough in investments to pay off this property (flat) otherwise I'd be really panicking. Worse case it they tried to repo i could cash eveything out and pay to keep the property.

Really don't want be on no blacklist though as eventually I'll wanna sell up and then buy a house with the misses.

I'll call them and plead ignorance (as that's what it was). Genuinely didn't consider all of this

[jpkeates]

The lender won't repossess initially.
If they're unhappy, they'll "ask" for the mortgage to be repaid, they'll only repossess if you can't repay the mortgage.

There's a risk you'll be blacklisted anyway.

[boletus]

Speak to an independent mortgage broker before doing anything.

It's an unintentional mistake.

The Hunter blacklist is mainly used to frighten the children.

[ash72]

I would first of all see if the lender you currently have your BTL if they do any residential mortgages, simply looking on their website, if they do then this may be good news as they may transfer you over onto a residential mortgage. If they don't then you need to speak with a mortgage broker who can find you an alternative lender for your situation.

Remember your insurance policy may also be invalid.

[eshjie]

Thanks for all the responses. It was a mortgage broker (L&C) which made me realise the position I was in. Went through all the standard questions and right at the end I mentioned my current one is a BTL (didn't even consider as an issue as was the level of my own ignorance). At the point the advisor pretty much stopped giving any advice and said that as I've disclosed that to them it's their duty to let all the lender know and it may work against me. I had no idea how to proceed and just told him to hold off, did a bit of research, everything looked bleak and then I posted here.

So do I speak to another advisor and explain the situation up front and see what they suggest. Or do I just go straight to lender.

The replies here currently are in favour of going to lender for the first part so far. The lender is TSB and they do do residential mortgages.

It's def thrown a spanner in the works of my plans as I was looking for an interest only residential mortgage on it and I doubt TSB will offer that! Beggers can't be choosers I guess!

Also wouldn't going to a broker and not having the discussion with my lender end up worse for me for just not owning up to it?

[boletus]

as I've disclosed that to them it's their duty to let all the lender know

Duty?! LMFAO.

I'd be facinated to know what "the mortgage broker code of duty" is.

Grassing up a punter if they don't buy from you definitely isn't included here;

https://www.handbook.fca.org.uk/handbook/MCOB.pdf

[boletus]

Just to add;

"it's their duty".

-Ha, ha, ha, ha, ha ....

[Kape65]

If you have the funds available I would repay the mortgage in full and then remortgage (if you need to) as a residential. I wouldn't expect them to pursue the matter any further if they did find out.

[eshjie]

Haha yeah they went pretty cold on me once I mentioned that detail. Basically said he would have to mention it to all the lenders given he is now aware of my "potential mortgage fraud", that's why I didn't go forward as I didn't like the sound of that.

If you have the funds available I would repay the mortgage in full and then remortgage (if you need to) as a residential. I wouldn't expect them to pursue the matter any further if they did find out.

I'd have to empty my ISA to do this though so hopefully there is an alternate. Paying it off is my last resort tbh to stop myself being reposessed if it somehow came to that.

[eshjie]

I think I'll have the same conversation with another broker then and see what they say just before I call up TSB now I know they ain't all likely to grass me up...

[loanarranger]

I have come across a similar situation although the circumstance were different. My client had a justifiable reason for wanting to move into what had been a formal BtL and with ERC’s on the fixed rate. I wrote to the lender explaining the circumstances behind the request and they in turn granted consent for my client to occupy the property without a change in the funding structure, the only condition which was made was that no additional monies or product transfers would be considered until the borrower vacated the property and returned it to a performing BtL. This was agreed to and once the ERC’s expired a regulated mortgage was submitted and approved by another lender.
My advice is to write to the lender explaining what has occurred and seeking their consent to be allowed formally to maintain the current borrowings.
I hope the above might help you overcome your situation.

[islandgirl]

what a sensible suggestion

[eshjie]

Ok so I have a bit of an update. I spoke to a more friendly mortgage broker who did not make me feel like I was a criminal for the situation I found myself and they put me at ease and also encouraged me to speak to the lender also.

So, I called TSB and explained the situation and how I got myself into it and they were quite simply incredibly understanding. They are going to switch me over to a regulated mortgage instead and so I have been going through that process. The advisor is also going to see if they can waive the ERP as it's close to term end. Even if they can't it's not the end of the world although it's a 1.3k lesson.

I may even still be able to get an interest only residential mortgage which is what I wanted originally. Ran though all the details over past couple of days and he's going to come back to me in soon.

All in all, it's looking like it will be sorted out just fine.

Thankyou to all who gave their advice and opinions, you helped put me at ease when I was stressing a bit and assisted me in navigating this. Your time spent to reply to me is appreciated.