Do I need to tell my Mortgage Lender that I am planning to let property out?

BreffniWeffni

Hi

NOT LOOKING FOR FINANCIAL ADVICE - OPINION ONLY

I had a face to face meeting with my Mortgage Lender today. It was an interesting exchange as I believe he is in the same Neg Eq situation as me. I was given good news about a change to tracker shortly which will bring some good savings.

However he mentioned that if I did ever let the place out, technically, I should tell them and they then have the pleasure of putting me on a very expensive investors mortgage rate which I simply couldnt afford. He did say that I dont have to tell them. Nudge Nudge, wink wink.....

If I do rent this place out I would plan to do the above board things yes like property tax, income etc. However my questions are:

- Do I HAVE to tell my mortgage lender I am suddently renting this place out?
- Do mortgage lenders, banks and the revenue have any cross lines - ie do they talk to each other?

Thanks:mad:

chris85

BreffniWeffni wrote: »

Hi

NOT LOOKING FOR FINANCIAL ADVICE - OPINION ONLY

I had a face to face meeting with my Mortgage Lender today. It was an interesting exchange as I believe he is in the same Neg Eq situation as me. I was given good news about a change to tracker shortly which will bring some good savings.

However he mentioned that if I did ever let the place out, technically, I should tell them and they then have the pleasure of putting me on a very expensive investors mortgage rate which I simply couldnt afford. He did say that I dont have to tell them. Nudge Nudge, wink wink.....

If I do rent this place out I would plan to do the above board things yes like property tax, income etc. However my questions are:

- Do I HAVE to tell my mortgage lender I am suddently renting this place out?
- Do mortgage lenders, banks and the revenue have any cross lines - ie do they talk to each other?

Thanks:mad:

Your mortgage would be a owner occupier residential mortgage. If you let it out you would not be able to be on this rate.

Do you have to tell them? Your mortgage agreement is breached if you dont so yeah you do.

You will need to get different property insurance if rented out. I would not lie to the insurance as they will find out. The insurance company will write to the mortgage company and advise of the policy change as the lender has vested interest in it.

Also you may get this thread closed as you are basically asking if you can get away with it. This would be fraud as you are attempting to decieve the bank and thus against forum charter.

nlgbbbblth

Well if you're just "renting out a room" it won't count - as you're still living there and it's deemed your PDH. (principal dwelling home).

Otherwise - yeah, you should tell them. The insurance company will anyway.

As for the Revenue and the lender - they don't talk to each other - at least not in situations like this.

uberwolf

do the bank and revenue interact? Yes. Mortgage interest relief is administered by the Bank.

I've seen a number of instances recently where Banks have allowed mortgage holders to let out the properties without any impact on the mortgage rate, once they were consulted in advance.

phormium

Yes you should tell them, will they find out if you dont? Personally I would take the chance.

You must do all the proper registering stuff, change your house insurance to cover the rental, the company can send letter of indemnity to the bank, may or may not even show type of insurance, I would send it straight to head office rather than a branch. Change may not even be noticed, people change insurance the whole time.

TRS needs to be cancelled, contact Revenue, bank only applies what revenue tell them, may again not even notice it is gone.

Unless the banks are now actively checking all mortgages regularly to see whether TRS is being paid and what insurances are there I cannot see how they will pick it up, also there may be nothing in your original loan offer to say they can increase the rate if you rent it out. There may be a clause saying you should get their permission but that does not mean they are free to increase the rate.

Before everything went belly up several banks were giving RIP mortgages at same tracker rates as residential mortgages so there was no difference paid whether it was your residence or rented. Therefore how can their be any accusation of fraud if this is the case for your loan, check your loan offer, at worst you are simply not adhering to the requirement to ask their permission.

I think your mortgage adviser was trying to tell you keep your mouth shut, if you think he was too then take that advice.

JTMan

Good god.

Don't tell anyone. Some banks charge significantly higher rates for investment mortgages. Some banks will literally triple your mortgage rate.

Stay quiet.