Shelter’s Income and expenditure figures highlighted13:57 PM, 4th February 2019
About 2 weeks ago 35
We are about to buy a residential house to live in, partly financed by taking out a new residential mortgage, and partly financed by taking out a Let-to-Buy mortgage on our existing home and releasing equity from it.
The house we are buying is in very poor condition and is not habitable until some essential repairs are carried out. We estimate the repairs would take 2 months to complete.
Our mortgage advisor, who has arranged both mortgages for us, told us there was generally a period of 60 days allowed before we must move out of the Let-to-Buy property (the one that is currently our home, but will be let out in the future). He advised us not to inform our solicitor of this, because if we did she would be legally obliged to inform the mortgage lender, and that it was better to just avoid mentioning it.
However our Let-to-Buy mortgage offer has just come through, and in the terms and conditions it says we must vacate the property immediately on completion of the mortgage, and that we must send written confirmation that we will do so. It is too late for us to arrange an alternative Let-to-Buy mortgage because if we go past the 31st March deadline when stamp duty goes up, the whole deal will become affordable for us.
We can’t afford to move into temporary rented accommodation, because it would use up our repairs budget for the new house. We didn’t mind ‘not mentioning’ that we wouldn’t be moving out immediately, but sending written confirmation that we will move out immediately when we know it’s not possible (ie. lying in writing) is quite a different matter. We are quite annoyed with our mortgage advisor for not being aware of this condition on the mortgage he arranged for us, as he knew the poor state of the house we are buying.
We have asked his advice about what to do now, and he said we should join the electoral register at the new address as soon as we complete, and as long as the mortgage is being paid, he is sure the lender will not check whether we have actually moved out of the let-to-buy immediately.
My question is, should we follow his advice? We expect to be able to move into the new house 2 months after completion, so apart from sending the untrue written confirmation, we would be in breach of the mortgage conditions for 2 months.
What are the likely consequences of this if our lender does actually send someone to check and finds us still living at the current house? What is the worst case scenario that could occur?
We would be grateful for any advice
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