Buy to let landlords are harmed by bad brokers, and could end up losing money due to misinformation and poor mortgage broking, according to a recent statement from The Mortgage Broker Ltd.
The Mortgage Broker Ltd has condemned ‘unprofessional’ and ‘lazy’ brokers who fail to source their clients the best available market deals. They claimed that some private landlords could be locked into high standard variable rates due to poor, or even fraudulent mortgage broking. They may also receive poor deals from under-performing brokers not making the expected effrort for their customers.
The firm has asserted that certain brokers can engage in outright fraudulent behavior, lying about income. The Mortgage Broker Ltd managing director Darren Pescod said: ‘We have seen evidence of mortgage brokers securing mortgages for investment properties, which are then inhabited by family members. Or they have arranged a mortgage for an investment property, that is either a multi-let, Airbnb or student accommodation, without informing the lender. This is highly unprofessional. If a lender finds out, it could withdraw the mortgage and in a worst case scenario, the client could be slapped with mortgage fraud, which will severely affect their ability to borrow funds, or obtain mortgages in the future.’
The firm also warned landlords that it is imperative they disclose the whole truth about their investment to lenders. Pescod explained that some landlords have been caught telling ‘white lies’ to lenders, failing to realise the severity of their actions, which could land them in serious trouble for fraudulent activity.
He went on to explain: ‘Lenders are more geared up now to do post-application checks and are on the lookout for scheme abuse and mortgage fraud.’