renting out a home & not telling the lender

mojo21

A friend of mine has been renting his house out during the recession, but has not informed his mortgage lender that it is rented. He has taken out landlords insurance.
Question.....If he claims on his landlords insurance will they insurer be able to wriggle out of paying because he has not informed the mortgage lender that the property is rented?

olly300

Why doesn't the "friend" just get permission to rent from the lender. While make life easier all around.

mojo21

because the blood sucking lender will more than likely switch him to a much dearer buy-to-let mortgage or charge a fee for doing nothing as usual........thats why.

Wutang_2

mojo21 wrote: »

because the blood sucking lender will more than likely switch him to a much dearer buy-to-let mortgage or charge a fee for doing nothing as usual........thats why.

You know a lot about your friends mortgage! Why are they 'blood sucking'?

Why don't you grass your friend up instead? Its fraud and they should be locked up for at least 10 years

lisyloo

because the blood sucking lender will more than likely switch him to a much dearer buy-to-let mortgage or charge a fee for doing nothing as usual........thats why.

I get the smilie but does your friend always obtain goods & services dishonestly when he doesn't like the pricing model??

I can't see the loan as being a factor in an insurance claim, but I couldn't say for sure.
If he has been honest with the insurer then I can't see why the loan would be a factor.
Although if they found out he had lied, that might give them good reason to crawl all over the claim with a fine tooth comb.

huckster

Mojo

If you read the many online forums, there are thousands of people who have let their properties without telling the mortgage company. This breaks the terms and conditions of the mortgage, so the lender could take sanctions against the borrower. The most likely is to backdate the interest and fees to the date the property was first let. I guess if this is not paid, they could insist that the mortgage is repaid in x no. of days forcing your friend to finding alternative lending or lose the house.

If your friend has landlords insurance and has disclosed accurate information to them, then the issue with the lender will not affect the Insurance. Your friend could be caught out in the event of a large claim if the mortgage company have to be advised, due to their interest on the property.

FlameCloud

It shouldn't affect the potential to settle a claim although if the insurers find out they would more than likely transfer it through to their fraud teams- after all if he has already lied to one financial company why would he not do the same to them? This could create whole heaps of problems on its own.

Depending on the insurer, it also wouldn't surprise me if a quiet call to HMRC was made at the same time