Many buy-to-let landlords are simply not getting the best mortgage deal, or find themselves trapped into mortgages with high standard variable rates, as a consequence of deals set up by bad mortgage brokers, it has been claimed.
Unprofessional brokers, who are ‘lazy’ and only use lenders that they are familiar with, rather than searching for the best deal, are the primary reason why some landlords are missing out on good mortgage deals, according to The Mortgage Broker Ltd, which specialises in buy-to-let mortgages.
In the worst case scenario, bad brokers can be outright fraudulent – lying about income, or other aspects relating to the applicant.
Darren Pescod, managing director of The Mortgage Broker Ltd, 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.
“Some landlords don’t understand the severity of a little white lie to the lender, or understand the implications of not divulging their full intentions with the property, or their personal situation. Lenders are more geared up now to do post application checks and are on the lookout for scheme abuse and mortgage fraud.”