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The Importance of Telling the Truth

Here’s a cautionary tale which highlights the importance of telling to truth when applying for a mortgage….

a cautionary taleA mortgage broker was contacted by A & B who were life partners living at separate addresses in Stockport & Didsbury, both were employed with no children.

They wished to buy their first residential property together in Swinton from one of their parents at full market value with the deposit coming from raising money on a property bought nine months earlier for cash in A ‘s sole name which had been renovated and was now ready to rent out.

The mortgage broker was advised by A this property was empty and had been so since purchase.

However, both had poor credit histories.

Two mortgages were required –

  • one for the purchase of the residential property in joint names
  • one for the re-mortgage of the Buy to Let property in A’s sole name.

The number of lenders available were restricted due to their poor credit histories.

The mortgage broker researched the market and found two separate lenders willing to accept their poor credit histories and capital raise on the Buy to Let property.

Both A & B were both living at the Buy to Let property.

The addresses given for the mortgage applications were previous rented addresses and A & B had not changed their status on the electoral roll.

When the valuer called at the Buy to Let property to do the valuation for the lender the valuer asked client B who was living at the property as it was all fully furnished with photos on the wall of both A & B – B advised the valuer he was the property owners brother and lived there.

The valuer reported the circumstances back to the Buy to Let lender who cancelled the mortgage application on the basis that the applicant had given false information to obtain the mortgage.

This led to the mortgage broker cancelling the other mortgage application again due to false information being submitted.

The clients were out of pocket £ 450 for the valuation fee and additional monies that had been paid to solicitors before obtaining mortgage offers.

Giving false information to obtain a mortgage is mortgage fraud.

As the mortgage broker fully complied with the requirements of the Financial Conduct Authority ( FCA ) immediately withdrew both mortgage applications and refused to transact any further business with A & B.

The moral of this story is always tell the truth regarding your circumstances – in most cases a mortgage should be able to be achieved.