Renting out my Primary Residence
Has anyone approached their lender to ask if they could rent out their Primary Residence? What is the best way to approach/frame the conversation with your lender so that they will allow it? If I say I need the rental income to pay my bills, is this the best approach? Thanks!
What type of loan do you have and how long have you been in the home?
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@Tyler Cook - generally a conversation with your lender is not necessary to convert your primary residence into a rental. Only reason I can think of to have that conversation is if you are buying a new property and need to use the rental income to help you qualify for the next loan.
Are you asking about something you own? If so you don’t need to ask. If you are under contract, you can ask but also, if you are renting out bedrooms after close, it won’t matter as much.
Based on what I know you don't really need to ask your lender to rent out your primary residence. If you are renting out a room or something like that you don't need to let them know. If you have lived there for a year and are looking to rent out the entire place you are not required to tell them either. Owner-occupied loans only require the owner to stay there for a year before you can move. If you have a good reason to move as well such as job change, deployment, etc. that requires you to be closer to a different area that is considered a valid reason to move and they can't really penalize you.
If you wanted to talk to them about it, ask about how long you would need to be owner-occupied to move out and rent it and/or what reasons would be valid for needing to leave the home sooner than that 1 year.
Lenders don't care too much about what you do with the property as long as you pay the mortgage.
You will need to have this conversation with your homeowners insurance provider. Insurance will not cover rental issues on a basic homeowners policy. There are many companies that cater to this these days.
Quote from @Caleb Brown:
What type of loan do you have and how long have you been in the home?
I have an FHA loan and closed in March of this year. I believe I need to be here 12 months before renting but have heard stories of people successfully negotiating new terms with their lender based on need, primarily. Any thoughts?
Quote from @Tyler Cook:
This isn't like a peasant approaching royalty. There's no formality. They won't throw you in the dungeon or chop off your head.
"Hi, Lender! I bought a house a couple years ago and some things have changed. I'm wondering what my options are for keeping the house and renting it out."
It's that easy.
@Nathan Gesner I bought the house in March of this year and standard FHA terms say you cannot rent a primary residence within the first 12 months. But I see your larger point
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#3 BRRRR - Buy, Rehab, Rent, Refinance, Repeat Contributor
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Just tell them, they won't punish you for it. I'm sure they will tell you that technically you can't do it but if they never hear about it you're good.
@Eliott Elias there is something called an acceleration clause that I want to avoid, would rather be upfront
Quote from @Tyler Cook:
@Nathan Gesner I bought the house in March of this year and standard FHA terms say you cannot rent a primary residence within the first 12 months. But I see your larger point
Even then, they may allow it because of your current situation. I have a friend that bought a house with a strict "no rent" stipulation. She got married and was moving states, so she talked to the lender and they gave her instructions on how to write a letter explaining the situations, they gave her a written letter back authorizing her to rent it.