Asked about renting when paying off mortgage - why?

pjs493

So today I paid off the balance of a mortgage my late husband had on a flat he bought in his early 20s before we got married. He lived in the flat for a few years then we settled down and moved around with his job, but he’s always kept the flat. While waiting for probate I made the maximum overpayments on the mortgage and today was able to pay off the balance, having received the Grant of Probate and mailing it to the mortgage company last week.  

While on the phone to the mortgage company they did their statutory bit by reading certain things from a script. I was asked if the flat was rented out or if I intended to rent it out in the future. I thought this odd, but a reasonable question regarding our current situation because we've been moving around with my late husband’s job so don’t live in the flat. But I wondered why it was any of their business as to what I intended to do about it in the future. I simply stated that my husband bought the flat as a single man and with two children and two dogs it wasn’t big enough for us now so I’d likely sell it to buy a more family friendly home. I really don’t know what I plan to do with it as I’m still reeling from his unexpected death. 

My next call was to my bank to warn them off that I was about to make a large payment to pay off the mortgage. While on the phone to my bank I used online banking to make the transactions and unsurprisingly it was flagged and I was transferred to the fraud team for unusual account activity. I expected as much given the sum of money I was transferring. Again, my bank asked me if I intended to rent the flat out or live in it in the future. I reiterated that it was ideal for my husband as a single man in his early 20s, but not ideal in my 40s with two children and two dogs. But I did wonder again why it was relevant to ask if I intended to rent out the flat. I simply don’t know what I plan to do with it in the future. 

Can anyone give me any insight into why I was asked this question, both by the mortgage company when I got the redemption figure and by my bank when I was actioning a large transaction to pay off the mortgage?

Why does it matter to either the mortgage company or my bank if I’m clearing off the debt? Conversely, my bank did ask me as part of their fraud protocol if I’d ever visited the flat (presumably to ensure it was a genuine property) and I replied that I’d visited many times and spent time there before my husband and I married. But I still don’t understand why my future plans for it are relevant. 

pramsay13

If you are renting out property you have to tell the mortgage company and they might offer consent to let (usually for a fee) or make you take out a buy to let mortgage, usually at a less favourable rate. They were maybe checking you hadn't been doing that.
Not totally sure why the bank would ask, although it will become relevant for capital gains calculations if you sell it.

SilverSix

I agree its peculiar, they'll have no financial interest once repaid so it makes no difference what you choose to do with it.

Sorry to hear of your husbands passing.

user1977

pramsay13 said:

If you are renting out property you have to tell the mortgage company and they might offer consent to let (usually for a fee) or make you take out a buy to let mortgage, usually at a less favourable rate. They were maybe checking you hadn't been doing that.

But their remedy would be to either force you to get rid of the tenant - or redeem the mortgage, which the OP was literally in the middle of doing anyway! I don’t think they can somehow “fine” you after the event, so it seems an odd question.

Flugelhorn

probably market research they may be planning on offering assorted services for you . as others have said it is none of their business. I
 had an empty, no mortgage property for a couple of years and various institutions were fixated on what I was going to do with it - probably a script 

ACG

I dont have the answer, but you should/could ask the companies asking the question. 

pjs493

user1977 said:

pramsay13 said:

If you are renting out property you have to tell the mortgage company and they might offer consent to let (usually for a fee) or make you take out a buy to let mortgage, usually at a less favourable rate. They were maybe checking you hadn't been doing that.

But their remedy would be to either force you to get rid of the tenant - or redeem the mortgage, which the OP was literally in the middle of doing anyway! I don’t think they can somehow “fine” you after the event, so it seems an odd question.

Additionally, my husband was in the military and the mortgage provider have a policy of not disadvantaging military families who can't live in a property due to the exigencies of the Service meaning those who have to move away due to work and choose to rent out aren't forced onto buy to let or higher interest rate mortgages. So the current rental status of the property was irrelevant under the circumstances anyway. Presumably they were asking the question because they have a script to read, but I was slightly puzzled as to why either the mortgage provider or my bank cared what I did with the flat after paying off the mortgage. Perhaps the bank were asking as part of their fraud prevention questions. Who knows.

pjs493

ACG said:

I dont have the answer, but you should/could ask the companies asking the question. 

I probably should have done, but my children were distracted by a movie while I sorted out important phone calls so I was up against a clock of how long their attention could be distracted before they needed/wanted something. I also didn't want to come across as defensive with the mortgage company, or set off alarm bells with the fraud team who could have cancelled the payment if they thought something was amiss.

It has sometimes been difficult sorting out various things related to my husband's estate because they'll be settled watching a movie or playing with some toys and then I spend 40 minutes on hold before I get a chance to speak to someone, by which time all hell has broken loose with the little ones.

amnblog

They asked you this because it is on their script. Why is it on their script? That we cannot answer.