rent to rent? how vigilant are the banks?

S

slimjim

Guest
Hi folks,

Is there many people out there who have decided to risk their tracker mortgage to rent their primary residence and rent another house elsewhere??
we are currently on the verge of negative equity so selling is not an option.
we need to move location due to a change in working circumstances, and feel it would be the best time to go now (rather than wait a year or two) as our eldest is starting school next year.
 
Rent it out and dont tell the bank you are renting it. This topic has been discussed in other threads. In my opinion they will never find out. As long as you are paying the mortgage how could they.
 
I understand how the bank will never know as long as mortgage is being paid every month but what is the position on TRS on the interest ? Dont you have to stop this as soon as the property is rented ? will the bank not see the TRS has stopped?
 
Plus you would need to let your home insurance providers know and this may also get back to the bank as the bank have an insurable interest on the house.
 
jmur said:
I understand how the bank will never know as long as mortgage is being paid every month but what is the position on TRS on the interest ? Dont you have to stop this as soon as the property is rented ? will the bank not see the TRS has stopped?
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Yes you have to stop claiming TRS. Revenue rules clearly state that. The bank will see the TRS stopped however this may not mean they check the reason. They are used to see TRS stopping since it is only granted for a number of years anyway.
 
fizzelina said:
Yes you have to stop claiming TRS. Revenue rules clearly state that. The bank will see the TRS stopped however this may not mean they check the reason. They are used to see TRS stopping since it is only granted for a number of years anyway.
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If he has the house over 7 years that is not an issue.
 
Nor will the insurance company tell the bank as someone said. The letter of indemnity provided for the bank doesnt differ whether its rented or owner occupied.
 
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