If you have a second property you are currently not using? Renting it out can be quite tempting if you own that property. But if you are still paying its mortgage, you must tell your mortgage lender, who won’t allow it. You can’t seem to eliminate the idea of making some extra bucks.
Can I rent a Room in My House with a Mortgage?
Renting a spare room to generate extra income can be a good option. You can decide and do it whenever you want, especially if you’re still paying the mortgage. It becomes even more interesting that now you can pay your mortgage loan with rental money. However, you need the full consent of your mortgage lender.
Renting My House on Mortgage Legally
Suppose you wish to turn your home into a source of steady income. You still can do it without violating the laws. You can take the following measures:
- Check Your Contract
Go through your contract and learn about the kind of loan. This will help you understand the applicable guidelines regarding home renting laws. You can also call your mortgage lender to ask about the procedure to transform your home into a rental house.
- Upgrade Your Insurance Policy
Once you’re done convincing your mortgage lender to rent out your home. Your next step should be to modify your insurance policy if you have any. This will provide a significant amount of coverage and save you from liability.
- Monitor Changes in Tax
Seek guidance from a seasoned tax accountant regarding your tax reporting duties as a landlord rather than an occupant.
- Receive Required Permits
You might require a special permit if it is your first time renting a property. Your government issues such a permit after ensuring your property fulfills all safety guidelines.
- Understand Housing Laws
If you will appear as an available rental, learn about the Fair Housing Act. It restricts homeowners from discrimination based on race, color, sex, family background, or disability.
Do I Need Permission to Rent Out My House?
Besides taking permission from your mortgage lender, certain other permissions and requirements exist. To turn your house into a revenue-generating machine, you need:
- Take permission from your mortgage provider
- Acquire a certificate of occupancy
- Inspect the Home Owner Association (HOA) policies
- Get a landlord permit
- Examine regional rental regulations
- Meet short-term rental demands
- Get the required insurance coverage
- Find out about tax implications
Renting out your vacant property is a good move, a futuristic investment. But it has to be done without breaking the law. Especially when you are still paying the mortgage and don’t fully own the property, discuss your idea with your mortgage lenders before looking for new tenants.
We at Red Door Funding are the reliable mortgage lenders you need. Call us at (832) 539-1099 to discuss your concerns.