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2nd mortgage quandary

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  • 14-01-2019 10:36pm
    #1
    misc2013
    Registered Users Posts: 251 ✭✭


    I have a mortgage and plan to sell. I am an accidental landlord and had to move for family reasons so had no option but to rent out house as crippling negative equity made it unsellable......until now.


    My first thought is to go to existing mortgage provider for the new mortgage as I have a mortgage there already, right? BUT i'm worried about the fact that I have been renting out my house the past few years. Could they penalize me for doing so? I have heard that banks charge a different rate if you rent out your house but I didn't tell them. I was going to tell them and rang the bank but the clerk I spoke to on the phone advised me not to tell them!!


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    #2
    milhous
    Registered Users Posts: 415 ✭✭milhous


    misc2013 wrote: »
    I have a mortgage and plan to sell. I am an accidental landlord and had to move for family reasons so had no option but to rent out house as crippling negative equity made it unsellable......until now.


    My first thought is to go to existing mortgage provider for the new mortgage as I have a mortgage there already, right? BUT i'm worried about the fact that I have been renting out my house the past few years. Could they penalize me for doing so? I have heard that banks charge a different rate if you rent out your house but I didn't tell them. I was going to tell them and rang the bank but the clerk I spoke to on the phone advised me not to tell them!!

    It'll be a new mortgage application. They'll use the rent as part of your income maybe? If it was getting paid into your account they'll be wondering what it is the. Will it show up on your p60?
    If youre buying to let the LTV will be at like 75%.. But if this is your principal private residence and you can show you can pay the mortgage, your salary is the 3.5times the loan and you're gonna have a deposit of 20%, I don't see your past residence as an issue.. open to correction


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    #3
    misc2013
    Registered Users Posts: 251 ✭✭misc2013


    milhous wrote: »
    It'll be a new mortgage application. They'll use the rent as part of your income maybe? If it was getting paid into your account they'll be wondering what it is the. Will it show up on your p60?
    If youre buying to let the LTV will be at like 75%.. But if this is your principal private residence and you can show you can pay the mortgage, your salary is the 3.5times the loan and you're gonna have a deposit of 20%, I don't see your past residence as an issue.. open to correction


    It's all declared so I will have to show the revenue documentation.



    I was just worried about renting out the house cos I think I was supposed to tell them but didn't. I kept my tracker but I think that if the bank had known they'd have taken that off me.


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    #4
    milhous
    Registered Users Posts: 415 ✭✭milhous


    misc2013 wrote: »
    It's all declared so I will have to show the revenue documentation.



    I was just worried about renting out the house cos I think I was supposed to tell them but didn't. I kept my tracker but I think that if the bank had known they'd have taken that off me.

    Just no


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    #5
    paddles
    Registered Users Posts: 440 ✭✭paddles


    misc2013 wrote: »
    It's all declared so I will have to show the revenue documentation.



    I was just worried about renting out the house cos I think I was supposed to tell them but didn't. I kept my tracker but I think that if the bank had known they'd have taken that off me.

    Would they even look at that? If you're worried, maybe go with a different bank.


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    #6
    misc2013
    Registered Users Posts: 251 ✭✭misc2013


    milhous wrote: »
    Just no




    ???


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    #7
    secman
    Registered Users Posts: 6,264 ✭✭✭secman


    misc2013 wrote: »
    ???

    They may say its commercial, as in non residential for you and look to charge a higher rate.


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    #8
    misc2013
    Registered Users Posts: 251 ✭✭misc2013


    secman wrote: »
    They may say its commercial, as in non residential for you and look to charge a higher rate.


    I'm selling it to buy in a different part of the country. I'm not keeping it a rental. It will be vacant in 2 months.
    Could they look to claw anything back?
    I was thinking it might be an advantage to seek my new mortgage from them as I have a mortgage history there already as long as I don't get any hassle over the rental.
    Or would I be better going with a different bank. I can still show that that I have had a mortgage for 15 years without no issues.


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    #9
    milhous
    Registered Users Posts: 415 ✭✭milhous


    misc2013 wrote: »
    I'm selling it to buy in a different part of the country. I'm not keeping it a rental. It will be vacant in 2 months.
    Could they look to claw anything back?

    No. You did nothing wrong with renting out to pay the mortgage . How could they claw anything back, you paid the agreed amount. Stop stressing. Accidental landlords were and are fairly normal. You're moving now, it doesn't matter and you're going to have to disclose it no matter what lending institution you go to. So.. Just no... relax


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    #10
    Ray Palmer
    Registered Users Posts: 8,368 ✭✭✭Ray Palmer


    milhous wrote: »
    No. You did nothing wrong with renting out to pay the mortgage . How could they claw anything back, you paid the agreed amount. Stop stressing. Accidental landlords were and are fairly normal. You're moving now, it doesn't matter and you're going to have to disclose it no matter what lending institution you go to. So.. Just no... relax

    They can charge a buy to let rate on the mortgage as opposed to the residential rate they were charged. There have been reports of banks doing this. They certainly can claw back the difference but unlikely to do so when selling but have done so when people have be caught renting out property on a residential loan.

    Unlikely but legally the bank has every right and the mortgage holder has the legal obligation to report that the property is being rented out. Same goes for insurance


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    #11
    milhous
    Registered Users Posts: 415 ✭✭milhous


    Ray Palmer wrote: »
    They can charge a buy to let rate on the mortgage as opposed to the residential rate they were charged. There have been reports of banks doing this. They certainly can claw back the difference but unlikely to do so when selling but have done so when people have be caught renting out property on a residential loan.

    Unlikely but legally the bank has every right and the mortgage holder has the legal obligation to report that the property is being rented out. Same goes for insurance

    They are selling this property to clear the mortgage. Even during the on going life of the mortgage if they were found to be renting and the bank decided to pursue it they would probably just change the interest rates going forward.

    This mortgage will be cleared and gone and then a new application will start on it's own merit. I'd simply go with whichever bank is offering the best rates/offers at present. You can either afford the new mortgage or you can't, I wouldn't just stay with your current bank because you think they might or might not look favourably on you having a mortgage there before,/rented your house out to meet repayments.

    Try meeting with your local mortgage advisor in whichever bank you choose. You'll know better from half an hour with them as opposed to a few days of replies on boards


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