Will HMRC tell the lender my husband is living in the Buy to Let?

by Readers Question

10:12 AM, 11th August 2015
About 3 years ago

Will HMRC tell the lender my husband is living in the Buy to Let?

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Will HMRC tell the lender my husband is living in the Buy to Let?

Both my husband and I have a residential mortgage and two buy to lets. The sale on the second buy to let went through only two months ago and in the lead up to this time it was clear to my husband and I that our marriage was not working. He has moved temporarily into the buy to let whilst trying to find a suitable property to rent near the children and myself. We envisage this is a very temporary thing and that it we are in breach of our mortgage conditions.spill the beans

I have submitted a claim for tax credits following my change of circumstances as finances are in very short supply and have received a letter from the compliance dept asking for proof of bank statements, etc. They also want to see mortgage statements. I can of course provide this and have disclosed everything financially to them but I am slightly concerned that the HMRC will notify our mortgage lender with regards to our arrangement.

What I want to know is, although my soon to be ex husband is living in the property, albeit for hopefully a very short period of time, will the HMRC notify our mortgage lender.

Thanks in advance

Sian



Comments

Neil Patterson

10:18 AM, 11th August 2015
About 3 years ago

Hi Sian,

I obviously can't tell you HMRC will not inform the lender, but I have not heard of them doing this before.

Under FCA rules when you purchased the property you had no intention of your husband living in it so you did not mislead the lender on the application form which is a good thing.

However you do have a contractual responsibility to now tell the lender. It is possible the lender will give permission for your husband to live in the property for a period, but it is also possible they will want him to move out asap. It all depends on the lender and the circumstances as to how they will react.

Sian Jones

10:55 AM, 11th August 2015
About 3 years ago

Thank you Neil for your response.

I agree it was not or intention to mislead and this situation will be coming to an end very shortly.

I will have to discuss with the mortgage lender just am just worried they will pull the mortgage completely. The ironic thing is that the only suitable rental in our area at present is the rental that we have.

I will have to put my foot down and ask him to consider different options.

Thanks again.

Mandy Thomson

17:24 PM, 11th August 2015
About 3 years ago

I too would have thought it highly unlikely that HMRC would inform the mortgage provider - they would automatically inform another government department, typically the DWP but not private companies. For one HMRC is under resourced.

If the arrangement is likely to become more long term, is there not a way for your former husband to become your tenant, by doing a transfer of equity into your sole name?

You would have to have a BTL mortgage with no minimum income requirement (i.e. it allows rental payments only as repayment vehicle) and your credit record would need to be spotless.

Teg's Dad

13:47 PM, 13th August 2015
About 3 years ago

Sian,
It would be interesting to know what their reply is. They may well want him to pay a commercial rent whilst he is there.

Another point to consider is that most local authorities will not give your husband any housing benefit help to live in his own (albeit jointly owned) rental property. Have you considered separating the ownership of the buy-2-lets. He then, after the divorce, would not be legally related to you although your council may take a different view.. I rarely deal with benefit tenants so am not as knowledgeable as others on here.


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