Do I have to notify bank I am renting my home if I move and get another mortgage?

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lionstour

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Do I have to notify bank that I am renting my home if I move down the country and get another mortgage?
 
Part of applying for a mortgage is to inform the lender of existing loans and financial commitments. Are you suggesting that you try to hide the old loan from the new lender and the Revenue and hide the new loan from the old lender?
 
mathepac said:
Are you suggesting that you try to hide the old loan from the new lender and the Revenue and hide the new loan from the old lender?
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No. I would inform the new mortgage provider of existing mortgage and also the revenue of renting my existing property.

Is it hiding something if I do not inform my existing lender of a new mortgage?
 
If you are going to rent out your home and move to another property you will need to tell your the mortgage provider of the old property that you are going to rent it out. The bank will then ask you to change your mortgage to a BTL mortgage.
 
Steve D said:
If you are going to rent out your home and move to another property you will need to tell your the mortgage provider of the old property that you are going to rent it out. The bank will then ask you to change your mortgage to a BTL mortgage.
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Why do I need to do that? Is it a legal requirment?
 
lionstour I tend to agree with you. If your are making your repayments then no harm no foul. Banks were happy enough to turn a blind eye when suited, so as long as fullfill your tax commitments and meet your repayments as agreed, then I'd stay stum!
 
I dont understand why a mortgage provider who you already have mortgage with would be doing a credit check..
 
Ceatharlach said:
lionstour I tend to agree with you. If your are making your repayments then no harm no foul. Banks were happy enough to turn a blind eye when suited, so as long as fullfill your tax commitments and meet your repayments as agreed, then I'd stay stum!
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The only difficulty I see would be if the bank I get the second mortgage with requires it to be an investment mortgage. Then again, if I am living in the property it would strickly speaking not be an investment property.
 
lionstour said:
Thanks for that. difference is I will be wanting to buy again very soon and I need another mortgage.
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Same diff really. As you've said, you'll tell the new-mortgage-bank about the old mortgage. The thread linked is relevant to oldbank.
 
lionstour said:
Why do I need to do that? Is it a legal requirment?
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Check your mortgage terms and conditions. They are likely to say that you are obliged to tell the bank if the status of the property changes from owner occupied property to a rented out property. They will then change the mortgage to an investment mortgage.

I have recently heard of a landlord who did not tell the bank that he had moved out of his property and that he had rented it out. The bank found out about this 3 years later and then issued him with a bill for the extra interest (i.e. the extra that he would have paid with a buy to let mortgage) that he should have paid for the 3 years.

The bank is also likely to have an issue with the insurance because they would consider the risks to be higher with a tenanted property than with an owner occupied property.
 
Steve D said:
Check your mortgage terms and conditions. They are likely to say that you are obliged to tell the bank if the status of the property changes from owner occupied property to a rented out property. They will then change the mortgage to an investment mortgage.

I have recently heard of a landlord who did not tell the bank that he had moved out of his property and that he had rented it out. The bank found out about this 3 years later and then issued him with a bill for the extra interest (i.e. the extra that he would have paid with a buy to let mortgage) that he should have paid for the 3 years.

The bank is also likely to have an issue with the insurance because they would consider the risks to be higher with a tenanted property than with an owner occupied property.
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I find it very hard to believe that a bank could do that. How could a bank prove when the person began to rent it out ect. Seems unlikely.
 
lionstour said:
... How could a bank prove when the person began to rent it out ect ...
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A number of ways, including :

  • PRTB property registrations are available publicly
  • TRS removal (TRS is administered by the banks on behalf of the Revenue)
  • House Insurance - the bank's interest must be declared on the policy, they will be notified of changes / cancellations
Not an exhaustive list, but as examples.
 
lionstour said:
I find it very hard to believe that a bank could do that. How could a bank prove when the person began to rent it out ect. Seems unlikely.
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I don't know if you checked out that other thread but the bank will know (or may have suspicion) once you cease TRS on the old place, or commence TRS on a new place. Plus there will (should) be a change of insurance, which the bank will be notified of as well (banks are usually named as insured on policies and, if the policy changes, they will be notified).

It's pot luck. Some (as mentioned on that other thread) did, in fact, notify the bank and nothing happened with their interest rate. Some (like Steve D's LL) did not notify and got charged back-interest.

You should check your mortgage terms and then weigh up the risk.
 
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