Change of circumstances-inform bank?

J

jb724

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I am due to emigrate this month and have rented out my PPR. It has therefore become an investment property.

I am on a fixed rate mortgage with my lender until Nov 2012. Am I obliged to tell them of this change? My concern is they may insist on me breaking the fixed rate and changing the mortgage to an investment mortgage now (of course at a higher rate).

I am going to put the house on the market this year anyway but as I asked am I obliged to tell my lender that it is now an investment property?

Thanks for any advice offered
 
You may be obliged to inform them. I wouldn't offer you any advice on such however if I faced a similar quandary I wouldn't be contacting my lender.
 
michaelm said:
You may be obliged to inform them. I wouldn't offer you any advice on such however if I faced a similar quandary I wouldn't be contacting my lender.
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+1 - albeit that (according to the sun. biz post) the banks are planning to enforce investment property rates on properties which were originally - but no longer - PPR's. That newspaper article suggested that they would be making greater efforts to investigate and enforce in this regard.
 
yes, trackers but only because they cost the banks money.
But it does mean that the banks are looking for money and if you are on a low fixed rate and they feel they can switch you to a higher variable rate on a commercial basis they'll do so.

But it does depend on whether your present fixed rate is high enough for them not to bother. But to be sure they don't charge - don't tell the thieving swine.
 
Surely, if they really want to crack down on this, it wouldn't be that difficult. Hire a third party to visit premises regularly and ask who is currently living in that property.

It's a very tough move however, since most of the people in that very situation are not investors or people with holiday homes. They are just young people who's lives moved on and they married / had families and couldn't live in a one or 2 bed apartment.

I'm guessing, if you are talking about a typical 300k mortgage going from one of these trackers to a fixed higher rate would be in the order of a 600 or 700 increase.

Out of curiosity, what else can those people do? The banks either force them to pay this extra monthly payment or relocated their family back into a one or two bed apartment? Also, if, like in another thread, somebody was unemployed and had to emmigrate, then obviously the tracker property is not their residence - so the banks will go after these people who had to emmigrate for this extra payment? Seems like finding out if its the primary residence and actually forcing this through are going to be pretty ugly affairs.
 
Can they really move you from the tracker after you rent the house out if it is not mentioned in the terms and conditions of the mortgage that you must inform them or keep this house as your PPR? I'm with AIB and can see no mention of it. Am I missing something?
 
trailblazer said:
Surely, if they really want to crack down on this, it wouldn't be that difficult. Hire a third party to visit premises regularly and ask who is currently living in that property.

It's a very tough move however, since most of the people in that very situation are not investors or people with holiday homes. They are just young people who's lives moved on and they married / had families and couldn't live in a one or 2 bed apartment.

I'm guessing, if you are talking about a typical 300k mortgage going from one of these trackers to a fixed higher rate would be in the order of a 600 or 700 increase.

Out of curiosity, what else can those people do? The banks either force them to pay this extra monthly payment or relocated their family back into a one or two bed apartment? Also, if, like in another thread, somebody was unemployed and had to emmigrate, then obviously the tracker property is not their residence - so the banks will go after these people who had to emmigrate for this extra payment? Seems like finding out if its the primary residence and actually forcing this through are going to be pretty ugly affairs.
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I'm in this situation. Had to emmigrate with work. Have a property in Ireland in neg equity. It is being rented out (thank god). My mortgage contract does not mention that my tracker will be lost if the property is no longer my PPR. I believe they can only enfore a rate change if the contract allows them to.
 
tmf said:
Can they really move you from the tracker after you rent the house out if it is not mentioned in the terms and conditions of the mortgage that you must inform them or keep this house as your PPR? I'm with AIB and can see no mention of it. Am I missing something?
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Not that I am aware of. If it is not mentioned in your contract - then they cannot move you from a tracker rate.
 
Agree - If it's not in the T&C's, then you're in the clear I'd imagine. Would be interesting to find out in which banks T&C's have this and from what date they added it.
 
My mortgage is a tracker with NIB and in the Terms and Conditions is states that if the property is rented out then they will change the mortgage to an investment mortgage.
I have had this mortgage with NIB for 4 years approx. and in each of the first 3 years they contacted me to check if I had renewed my home insurance. I had, however they asked me to send them a copy of the insurance cert. I assume they wanted to see if it was insured as my PPR or as an investment property.
 
Macstuff said:
I have had this mortgage with NIB for 4 years approx. and in each of the first 3 years they contacted me to check if I had renewed my home insurance.
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Yes - they have been very very diligent with this. That has been my experience - every year without fail, they check - and follow up until they are in receipt of the new insurance policy. Others have noted the same (as per a thread 12-18 months ago here on aam).
 
I'm in a similar position but with PTSB. I have looked through the documentation that I have and cannot find any conditions pertaining to changing rates on foot of changing the property usage. The loan agreement seems very short form though and I am concerned that I am missing the full list of T's and C's. Do any of you have experience or knowledge of PTSB policy/habit in this regard?
 
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Reading through the various different threads on this topic here and on other sites it seems that NIB are very diligent on this. It also seems to no PTSB customers can find it in their T&C's. It also seems that when customers contact PTSB they get conflicting responses. However, when requesting something in writing, PTSB refuse. All seems a bit dodge to me. Perhaps, it was not in the original T&C's and they plan to retrospectively ammend it. Or perhaps they are investigating whether the wording of the original contract will allow them to change Interest Rates when a change of use of the property occurs. AIB or BOI definitely do not seem to have it in the T&C's nor intend to do anything about it.
 
can they ring up the PRTB or NPPR or anyother authority
appart from that, the only way i can think that they can find out is through insurance

so, would it be worthwhile getting 2 insurance policies? incase they ask!
 
So are AIB or BOI not among the banks who are supposed to be clamping down on this trailblazer? Neither the RTE/Sunday Business Post report specified which banks intend to clamp down on this. I'd imagine that it'd be very easy for a bank to find out if tracker houses were being let out - all they have to do is check the PRTB database. If post was being delivered to a landlords residence and not the house that they had let out in this situation, would it be better to have all post redirected to the tracker house let out or would a request to change this be a flag to the bank?
 
Those are just my observations from reading different discussions in various online forums. Don't take it for granted that AIB and BOI won't do this.

I see in another new discussion that EBS have a strange condition in their T&C's which may or may not prevent this.

http://www.askaboutmoney.com/showthread.php?t=164500

Personally, I have am not involved in this so I am unsure whether having mail sent to the rented tracker property or not will help. I think if banks really wanted to clamp down on this and had the stomach for the backlash, then they can quite easily do it through a number of ways. The question is whether legally they can enforce a rate change.
 
Ok thanks trailblazer for responding. Just has me more than worried.
 
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