Can You Rent Out Your House if You Have a Mortgage Loan?

Being a homeowner is a rewarding feeling - it’s something most people work to accomplish in their lives. Having a home you can call your own is a feeling that no one can take away from you. But, many people ask the question of whether they can rent out their home while they still have a mortgage? There are many aspects regarding this subject that differ from one homeowner to the next, but in this article, we’ll discuss everything you need to consider if you want to rent out your house while having a mortgage on the property. These few insights may give you a clearer idea of how to approach the situation, as well as what you should remember when renting out your home.

What to know when considering renting out your home

The first thing you may need to do is contact your mortgage lender - they will be able to answer whether you are allowed to rent out your home while you have a mortgage (yes, you need permission). Also, a wise thing to do would be to read through your mortgage contract you have with your lender - the policies will stipulate whether you may rent out the house, if there are regulations on the matter, or if your mortgage lender bans such actions completely. 

Do Some Research

It is also essential to discuss the matter with your mortgage lender in connection with your contract, seeing as there may be regulations even if your contract allows rentals; the renters may be required to have renter’s insurance or other aspects in place. You will also need to inform your lender if you are going to move out, seeing as they’ll need your new address for billing purposes. Consider doing some research on your loan’s regulations and restrictions - it may vary according to the loan type you have; FHA, VA, USDA, jumbo mortgage, etc. Each one has different policies and will give you an idea of whether it is an option to rent out your house.

What to remember when renting out your home

After you’ve gone through all the paperwork and gotten the green light from your mortgage lender, there are a few things you should get in place for your tenants in order to prevent conflict and ensure both parties are always on the same page. The first thing you’ll need to establish is a lease term, whether it be month-to-month, six months, or a year-long lease if you’re not eager to sell any time soon. Also, consider the security deposit, which is usually the first and last month’s rent, the rental due date, and also whether the rental is pet-friendly or not. The eviction terms are also crucial, seeing as you will want to have a foot to stand on should there ever be a breach of contract.

Renting out your home can be a smart move in many cases; just be sure you follow the correct guidelines set out above and also go through the trouble of finding reliable tenants.

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