Renting on a mortgage

SEYMORE_BUTS

A friend who is a single bloke is struggling to met his mortgage each month. He now has the oportunity to live at his parents house while they are away for free for 8 months longer if needed.
He wants to rent his house without telling the brokers I have told him that he may have to OK it with them first. What are the implications of him doing this without telling them?

silvercar

Even if he doesn't tell them he must make sure he has the correct buildings insurance.

If he is only going to be doing it for a short time, I would be tempted to phone the lender and ask the question without giving his name.

If the lender did find out, by the time they took any action it would be almost time for him to move back in.

In practice they are unlikely to find out or take action, if they did find out, they could increase his mortgage by one percent or charge a few hundred pound "consent to lease" fee. Theoretically they could demand repayment of the mortgage but I've never heard of that happening.

If he had applied for a residential mortgage with the intention of letting the property he would have been committing fraud, obtaining money by deception. As this really was his home, he would "merely" be breaching a term of the mortgage - a civil matter between him and his lender.

Provided he keeps up with the payments, little is likely to happen. If he had difficult tenants they could return post from the lender marked "gone away" that could tip the lender off, but its not really in their interests to do so.

From a tenants point of view their tenancy is less secure, as in repossession the lender would not honour the tenancy, but as he will keep up with repayments, this shouldn't be an issue.