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Mortgage query

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  • 28-05-2017 10:13pm
    #1
    CuriousMinds
    Registered Users Posts: 2 ✭


    Hi all,

    Was wondering if anyone had any insight or advice on the following or maybe someone has been in a similar situation...

    I have in the last month bought a property as a first time buyer and have just found out that I have secured a new job in a different country.

    My thoughts are to rent the property out and change the insurance cover to reflect this. However I am uncertain if there are any legal constraints as originally I has initially intended to live in this property...

    Does anyone have any advice on this?

    Thanks in advance!


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    #2
    Paulw
    Registered Users Posts: 13,381 ✭✭✭✭Paulw


    Contact your bank and your solicitor. They should be able to clarify.


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    #3
    theboringfox
    Registered Users Posts: 544 ✭✭✭theboringfox


    The LTV % for investment property usually 50%. So I suppose you would not have got loan based on new circumstance. However I imagine once you own the house and all repayments up to date its fine. But your solicitor and bank will let you know. You will have to change the home insurance etc too to cover fact its rented. The updated policy will be notified to the bank. If it is your only house in country its your ppr regardless. You could look at renting out but keeping one room for yourself. Then its still your home and just doing rent a room etc.


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    #4
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    I would'f tell the bank anything unless they ask. It will only cause trouble.


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    #5
    myshirt
    Registered Users Posts: 5,245 ✭✭✭myshirt


    4ensic15 wrote: »
    I would'f tell the bank anything unless they ask. It will only cause trouble.

    That's bad advice.


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    #6
    L1011
    Registered Users Posts: 68,863 ✭✭✭✭L1011


    Did you get any FTB incentives, from the bank or Revenue?


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    #7
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    There are financial as well as legal considerations you need to consider.

    It would be worthwhile going to talk to an accountant/tax adviser as well as your own solicitor, a little forward planning now could potentially save you tens of thousands in the medium/long-term.


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    #8
    CuriousMinds
    Registered Users Posts: 2 ✭CuriousMinds


    Thanks so much for all your advice, have a meeting next week with bank and my solicitor.


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    #9
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    What normally happens is your lender migrates you to an investor interest rate (typically 1-1.5% above the rate for an owner occupier).

    When letting your property- 75% of the mortgage interest payable, is allowable as a tax deductable cost- so a lot of the increase in interest gets accounted for in your tax.

    You have to register the tenancy with the RTB- in order to claim this deduction (and of course, because its the law........)

    You have to appoint an Irish collection agent and/or representative- if you don't- any prospective tenant has to deduct witholding tax from the rent and forward it to Revenue (it gets very messy very fast if you go down this rabbit hole).

    Ideally- you'd appoint an agent to manage the property and the tenancy- however, this can cost anything from 10-20% of the gross rental income (however, on the brightside- its a tax deductible cost).

    I'd suggest joining the likes of Irishlandlords.ie and similar sites- to read the threads there and get an idea of what you may encounter- there are plenty of people in not dissimilar positions to you.


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