# Renting house - insurance policy will alert mortgage lender



## HMC (4 Aug 2011)

Hello,

I'm shortly going to be renting out my house.  Currently I have holiday home insurance since the property is unoccupied for long periods.  If I change the policy, this will alert my alert, who will undoubtedly move me to a variable rate and withdraw my tracker.  

I have not informed my lender of my intention to rent out the property, contrary to the t + cs of the mortgage.

Personal experiences welcome so I can make a decision about what to do.

Thanks


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## StartUp2011 (4 Aug 2011)

You should contact your mortgage provider and note that you are considering your options and what impact it would have on your mortgage. I have heard recently from someone who changed from an owner-occupier to a buy-to-let and the lender had no issues leaving them on their tracker mortgage.


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## wbbs (4 Aug 2011)

Doubt it will even be noticed, would definitely not alert them to it, just submit the policy.   If a query arises you can deal with it then.


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## kickstart (4 Aug 2011)

wbbs said:


> Doubt it will even be noticed, would definitely not alert them to it, just submit the policy.   If a query arises you can deal with it then.



I agree it may not be noticed, but if the query does arise, then how do you deal with it? You've handed all the cards to the mortgage provider, who will happily point to the violation of the T+C's, and at that point negotiation is not really possible. Better to think about StartUp2011's idea of running the idea up the flagpole it in advance, without making a commitment. Then you might get a chance to make the change without risk. The other way involves only risk, and for the duration of the mortgage.


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## serotoninsid (4 Aug 2011)

Is this the reason banks are so anal (at least that's my experience with nib and ub) in chasing up customers who have switched insurance companies?  Presumably their motivation is not just to check that the dwelling is still insured but to see the _type_ of insurance thats on there?

I tend to shop around for insurance - and the last few times, I get calls looking for a copy of the new policy schedule.


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## wbbs (4 Aug 2011)

Read your loan offer carefully before you approach them so, there may be nothing in there about changing the rate.   Probably depends on how old the mortgage is, rates were the same for several years on home loans and buy to lets so there was nothing different in the small print.   However all has been different for the past few years and lenders have obviously taken this into account in their T&Cs.


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## Knuttell (4 Aug 2011)

IIB charge their customers e30 to update their system if the customer manages to get a cheaper insurance price when renewing,they stung me once with that..

 ...never again,I just tell the insurer that the mortgage is with EBS...

that ended that particular sleeven money spinner in its tracks.


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## peteb (4 Aug 2011)

I'd be fairly concerned about your insurance being a policy for a holiday home.  Its misrepresentation and could void your policy in the event of a claim!


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## HMC (5 Aug 2011)

wbbs said:


> Read your loan offer carefully before you approach them so, there may be nothing in there about changing the rate.


 
That's a very good point.  The T+Cs state only that the mortgage holder must seek lender's permission before letting the property.


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## Bronte (5 Aug 2011)

The house insurance do not inform the lender you have changed the policy.  The bank do not get a copy of your insurance policy.  And if you're renting you ought to make sure you have proper insurance.  Personally I wouldn't tell the bank a thing.


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## PaddyBloggit (5 Aug 2011)

My bank (BOI) asked for a copy of my policy and want a copy each year if I change providers.


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## serotoninsid (5 Aug 2011)

PaddyBloggit said:


> My bank (BOI) asked for a copy of my policy and want a copy each year if I change providers.


Same as that.  Also, whenever I move away from an insurer, they write to the lien-holder to inform them of same (at least thats my experience in any event).


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## wbbs (5 Aug 2011)

Banks are advised by the insurance company when a policy is cancelled as their interest will be noted on it.  Some banks have systems in place then to write out to mortgage holder to look for copy of their new policy to ensure there is one in place, alternatively they might like to sell you one!  That is usually their motivation for contacting you, not really to see if you have rented it or not.


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## Brokesville (15 Aug 2011)

Guys I have never heard about banks asking for insurance details before. I'm thinking of renting out my place too and am in the same position as the Original Poster in that I am afraid my tracker will be taken so am thinking of trying to fly under the radar for a while. After reading this am just curious about the banks and insurance - do they ask you for a copy of your policy each year?


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## wbbs (15 Aug 2011)

The bank will have got a copy of your policy day 1 when you took out the mortgage, if you never change insurance provider than you won't hear from them but if you change house insurance company then the cancelled policy provider will write to the bank to tell them you cancelled the policy.  This is because their 'interest' will be noted on the policy.  Then the bank will contact you to ask for a copy of your new policy so they can be sure you have house insurance in place.   Again if you don't change from the new provider for several years you won't hear anything from bank, if you change providers every year then you should get letter from them each time.


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## csirl (15 Aug 2011)

I've a relative who's just started renting out (see other thread in this section).

She has a tracker mortgage. She rang her existing insurance company and got her existing policy amended. The banks interest is noted in the house insurance part (i.e. the part with rebuild costs etc.). This part of the policy was not changed even though the property was converted from PPR to investment - as far as the insurance company was concernd, there is no difference in risk between her family living there and some other family living there. As this part wasnt changed, the bank did not need to be informed of such by the insurance company. The other aspects of the policy were adjusted - contents, liability as now rented etc. etc. were changed, but the bank has no interest noted in them.


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## wbbs (15 Aug 2011)

I agree with above poster as well, I have often seen insurance policies and indemnity letters sent to bank by insurance companies and you could not tell from them that the house was rented, just showed amount covered and other bits of info.


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## Brokesville (15 Aug 2011)

Ahhh I've just copped on - I live in an apartment so I only have contents insurance. I guess my bank maybe got copies of the insurance from my maintenance company or something like that in the past.


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## RMCF (15 Aug 2011)

When I rented out my house and changed my house insurance to landlords insurance, I got a letter saying they will have to inform the bank. 

I immediately thought "there goes my tracker". But nothing has changed. Still have it and no sign of the bank taking me off it.

Fingers crossed.


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## Wales1 (24 Aug 2011)

Hi just joined, 

Im in a dileama, my mortgage lender is northern rock. Ive recently completed the paperwork and had all the jobs done to lease the property to the council on a 3 year lease. Without realising i thought I wouldn't have a problem in getting the OK from mortgage lender but they have stipulated in consent to let that i cannot lease to coucil only private. 

Ive spent over 1k in adjusting house for council and the sign over was to be today but my mortgage have said no. I have rang round other lenders and ive had a similar response. Please can anyone advise what to do? does anyone know of a lender that I could switch over to to lease to council. thank you


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## serotoninsid (24 Aug 2011)

@Wales1 - not sure what response you will get here as this is an IRL based forum and unless I'm mistaken, your query is based on a GB scenario?


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## Wales1 (25 Aug 2011)

Hi, thanks for responding, could you explain? im pretty desperate to identify another mortgage lender who will allow lease to council.


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## RMCF (25 Aug 2011)

Wales1 said:


> Hi, thanks for responding, could you explain? im pretty desperate to identify another mortgage lender who will allow lease to council.



@Wales1

Are you in the UK?


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## Wales1 (26 Aug 2011)

yes in the UK -wales


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## serotoninsid (26 Aug 2011)

Wales1 said:


> yes in the UK -wales


Has the penny dropped yet? (or should I say cent....this is an irish based forum - so different system ;-)  )


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## Wales1 (26 Aug 2011)

Hi thanks the penny did drop!!will stay over the water ;-)


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