Unsure what to do with bank

Hi Guys - a quick query.

I have 3 properties. All of them are investment properties - none are residential (long story).

For one of them they gave me the home owner rate as I said initially i was buying as a home - but I then rented it out (I paid the appropriate investor rate of stamp duty and all that though)

I am now trying to extend the interest only period on thsi property.

To do this I must submit all my accounts. I now live in the Uk - so I am assuming they will realise straightway that it is in fact buy-to-let given that all my personal financial details relate to the uk.

SO - how likely is it do you think that they would look for monies from the past given that i was paying the homeowenr interest rate (about €1200 a months) as opposed to the investor rate (c. €1700 a month).

If this is very likely then I think I might be better just paying the capital now on the homeowner rate and keep myself under the radar. But that would make things very very tight for me.

Does anyone have any idea / experience in a similar situation?

I am not solicitor so this is just from my own experience/understanding. The distinction between a home owner rate and a buy to let rate is not based on legislation it is just marketing talk from the bank.

However if you told the bank that you were buying the house to live in and they offered you a rate based on this, they could claim that you have broken the conditions of the contract and they want to put you on the buy to let rate. It all depends on what is in your contract.

I think they would have no chance of persuading a judge that they are entitled to put you on a higher rate retrospectively.

I also think that the bank are unlikely to be looking for problems, why would they want to put you on a higher rate which you cannot pay. Bad for Mr or Mrs bank manager, another customer going into arrears.

Also you dont need to signal to them that you are in the UK. If you tell them your salary you dont have to provide payslips, even if they would like that.

I believe that, at present at least, if you simply pay IO the banks will not take any action against you, even if they refuse to "agree" this and they huff and puff for a while.

My advice, pay IO, pay some extra as a capital payment occasionally, and ignore any correspondence from the bank unless it is legal action, (not just the threat of legal action).

zxcvbnm said:

Does anyone have any idea / experience in a similar situation?

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Well there's been lots like you on AAM. No one has ever had to be retrospective on this so I don't think you've anything to worry about there. Cannot see how they could possible do this in any case.

On the question of whether they can now move you to an investment rate, seems the banks are not doing this either (due to how bad the situation of borrowers are), and won't acknowledge it in writing but just 'ignore' that you are doing nothing wrong. In any case your contract if it was for a home loan, unless it has an actual clause on this cannot be changed to an investment loan.

What bank was it and what year and what type of mortgage was it. Dig out your mortgage documentation.

I think you should tackle your mortgage rather than trying to stretch yourself too much.