Mortgage offer received signing a new rental agreement

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Hi all I’m after some advice I am currently

Living with parents and have received a mortgage offer for a property im purchasing completion will be in the next few weeks once all conveyancing is complete.

The property im purchasing will need a lot of renovation works and a small extension. My plan was to continue living with parents but due to a change in circumstances I may need to rent for the next 6-12 months whilst my property is being habitable.

My query is will be signing a rental agreement cause any disruption to my mortgage offer? Do they do another hard credit search when renting property.

its a short term arrangement but I don’t want to jeopardise my mortgage offer in any way.

many thanks

Myci85

If your mortgage offer was made on the basis you wouldn't have rent payments as an outgoing, then that is a material change to your circumstances and should be communicated to your lender, as per the terms you will have agreed to.

How close was it on affordability?

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my affordability is fine I’m borrowing 50 LTV.

I actually pay towards the housekeeping for my parents which was all cleared when applying

so in terms of cost of renting there will be very little difference.

I was just advised not to take out

Loans, credit card agreements or car finance before mortgage completes so want to know if a rental agreement will have the same impact or a hard credit search

thanks

ACG

The lender may do further checks.

You also have a legal responsibility to make them aware of any changes in your application - rent and bills for 6-12 months is a pretty big change.

Affordability is not about the LTV, it is about how much they would lend based on your income and how much you are applying for. The other issue is insurance on an empty property. Most lenders work on the assumption you will be moving in on completion or within 30 days.

Im not the moral police here, I realise there is a real world out there. But ultimately you are looking to make some pretty big changes to what you declared to the mortgage lender. If the lender finds out, it will be mortgage fraud and breach of contract. Realistically the chances of you being found out and/or taken to court is slim.

The lender may do additional checks before completion. Some do, some dont, some only do it on the odd case for audit purposes.

There is a risk. Its up to you whether you choose to take it.

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does signing a rental agreement show on your credit file ?

ACG

Not normally, but I have heard about it changing - although I have never seen rent on anyones reports myself. Its supposed to be a way to help people who have poor or limited credit reports to boost their chances of getting a mortgage.

However, there might credit checks from letting agents.

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/comment/81901253#Comment_81901253

Not normally because there is no credit, you pay your rent in advance. Their credit checks may show however.

Presumably the property is habitable but you'd just rather work done whilst you arent living there? Or do you have a more specialist mortgage for a building thats uninhabitable?

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The property is habitable yes but always planned the renovation and extension hence I only borrowed 50 LTV and kept back funds for this purpose

MWT

If you are currently living with parents then the easiest option would be to continue doing that until the purchase is complete and then rent after that…

How extensive are the renovations as you should be declaring that to the lender as well, especially if it includes a period of time without a working kitchen/bathroom etc. …