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why do Mortgage lenders care about if you rent your property?

sacha1dog
sacha1dog Posts: 72 Forumite
Tenth Anniversary 10 Posts Combo Breaker
in Mortgages & endowments
Im considering a number of options at the moment one of which is to let out my property for a variety of factors.

I've read that you need to let your mortgage company know if you do this, but I've also read that some then move you over to a more expensive loan rate?

why would they do this? are some worse than others?

thank you.

Comments

  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    sacha1dog wrote: »
    why would they do this?

    Change of contract terms. The lender advanced you money to buy a home not start a business. The interest charged reflects the underlying risk.
  • Goldiegirl
    Goldiegirl Posts: 8,820 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Rampant Recycler
    The change of use could adversely affect their security.


    A home being lived in by the mortgagee and their family is likely to be cared for better than a house being lived in by different people every 6 months, who don't care how they treat the house
    Early retired - 18th December 2014
    If your dreams don't scare you, they're not big enough
  • ethank
    ethank Posts: 2,197 Forumite
    Holiday Haggler I've been Money Tipped!
    They can repossess a house from you much easier than they can from a property which has a tenant.
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