So a few months ago I contacted my tenant saying that I would have to raise the rent 300.00 next renewal (lease ends 2/29/24), she declined.
My options are move in it myself or rent to someone else, I’m also thinking maybe after start of new year I may ask her if she could swing a 200.00 increase.
I personally rent an apt for where I live, I was able to pay a 480.00 “walk away fee” which means I can break lease with no penalty with 30 days notice.
On this rental property mortgage I have to annually give them a copy of lease, w-2’s, asset and liability statement, well I received a dunning notice, saying that they didn’t receive my 2022 info, I was able to clarify that I got a heloc on the property and gave all the same info, and they had said that would suffice for 2022.
I had emailed the lending office a while back to see if I could keep the same mortgage if I convert to owner occupied, they said no I would have to tear up that mortgage and refinance at the current rate, the problem is my mortgage is 4.75 %, their current rate is 6.875 %.
In the original dunning letter they said if I don’t submit info for 2022 that I “may” not be able to borrow from them in the future, I’m presuming that would be the only “penalty”, I was thinking if that’s the only penalty for not reporting (if I move in it) I might take that trade.
It would mean not telling them that I moved in it (if I choose to move in) I hate to be dishonest and would feel a bit shady.
Are you saying that you got a NOO mortgage and that now you want to live in the property? Is the property titled in your name and is the mortgage in your name?
Of course the bank wants you to originate a new mortgage so that they can get a much higher rate. I highly doubt that the terms of your current mortgage would prevent you from living in the home.
You said you told your tenant you were going to raise her rent by $300 a month. That is a very significant increase. What is the monthly rent now? You said she declined which means she will be moving. Then you said you would offer her $200 after the new year to see if she would stay. This seems very unfair and downright mean to her. She’s likely looking for a new place now and you want to offer her a better deal later? I don’t get it. Go back and offer her something reasonable like a 5% increase.
I bought the place with the tenant in place, the mortgage is considered a IORR loan (investor owned residential real estate loan) if I moved in it myself it would no longer be an IORR loan and be subject to regular mortgage according to the bank.
As far as the increase I have been charging her way below market value, I got a special assessment that was 2,552.00 this year, even with a 300.00 increase it would still be slightly below market value…When she declined the 300.00 increase she said she will move in with her boyfriend so it’s not like she’d be stranded, I think she likes living there and would like to stay, the 200.00 increase I’m thinking about offering is something she might be able to swing but I’m not sure.
Mortgage companies consider a primary home, a secondary home, and a rental property differently. Insurance companies also consider the differences. The rates for each of these types of properties will be different and the terms will also be different.
Was your rental property ever your primary residence? If so, did you convert it to rental property? If you move back in, you will want to convert it back to a primary residence. The situation can get quite complicated, and you should engage a professional to manage this for you.