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If I move out of my home and rent it do I need to refinance with an investor loan or can I keep the mortgage I currently have?
Responses
Hi Jonah
You do not need to refinance your current loan, however you may want to change to interest only payments depending on your strategy. I would suggest that you speak to an accountant who can advise on this and also there may be some things to be put in place for your tax returns and for future scenarios . An example would be to get a valuation so that , if you sell in the future, your accountant can work out capital gains tax etc .
You don't need to refinance to another lender, but the terms and conditions of your current mortgage will most likely state that you must advise the lender when there are changes to your circumstances. Regards
Hi Jonah,
Whilst you don't necessarily need to refinance the loan to change the purpose from owner occupied to investment you might want to consider at minimum changing the repayments to interest only for taxation purposes.now whilst I'm not an accountant I have worked alongside accountants for several years & this is the most comment recommendation. As also mentored I would strongly suggest that you get a valuation down for CGT purposes. From a structuring point of view I would suggest refinancing the loan so the purpose is reset & makes it less murky for the accountant later. I hope this helps & feel free to contact me offline to discuss further.
Your loan can remain as there is no current checks. If you come to buy another home, either investment INV or owner occupied OO, I would check with a broker. Some lenders are ok with OO and INV loans on the lowest rates. Next time around will depend if you need the income to help service 2 loans.
No. Keep the loan you have if you're happy with it. You may just want to call a broker and ask if you can convert to Internet only.
Hi Jonah, unofficially I've been advised by a number of lenders that in this situation how would they know if its investment or not. Either wayits not a re-finance its a loan variation. the difference is that they is no full loan application.
That being said, yes you are meant to let them know and there could be a negative outcome in the future if you didn't and they found out.
Thanks. In terms of getting a valuation can I use the one on the Domain website or do I need something more "official"?
There are a couple of ways to go about it
I would advise an official valuation however you can get 3 real estate valuations and average the 3.
I have personally just gone through this and had to find 3 realestate agents who would go back 10years to give me an estimate as we did not get an official valuation when we rented our property out 10 years ago .