Question

I have a property I own and it still has a mortgage on it. I am in process of buying a second property, and am letting out my first property. Someone told me I need to advise my mortgage lender about this. It’s my house, if I want to let it out I should be able to do so. If I took a lodger in I wouldn’t have to notify anyone.

Can you clarify this for me??

Regards,

Thomas

Answer

Thomas,

You have a few questions and things that need to be addressed, your mortgage being just one of them.

Firstly, taking in a lodger is not an issue with most mortgage companies, as long as you are not making your property a HMO or house of multiple occupation.

By taking in a lodger you are still living there in the property. Your mortgage is probably an owner occupied mortgage, meaning it was granted on the basis you reside there.

By letting the property out and no longer living there, you technically need a buy-to-let mortgage. These mortgages are slightly different, and the mortgage lender also knows you will not be living there.

Your second issue here is the insurance on the property. Properties being let out can require different insurance policies. Your insurer for the building and contents granted the policy based on you living there.

If you needed to place a claim later on, the claim could be denied due to the fact they were not advised you moved and let the property out.

I hope this helps explain matters.

Regards,

Jon

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