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Beware you may have a harder time getting a mortgage if you plan to use the home with tenants, even owner-occupied. When refinancing our place (which we don't
by ryanianian 9y ago
Beware you may have a harder time getting a mortgage if you plan to use the home with tenants, even owner-occupied.
When refinancing our place (which we don't rent out) there was a lot of back and forth over this subject when I merely asked if it was possible - the bank got spooked. (We have excellent credit and can easily pay 3-4x the monthly costs fwiw.)
Eventually we convinced them we had no intention to proceed with renters (because we didn't it was just a question), but I imagine it would have changed the financials pretty drastically if we had actually intended on pursuing it. I don't know if a refinance versus original purchase made it different.
- mistermann 9y agoMore accurate advice I would say is, just don't tell the bank whether you plan to have tenants. At least in Canada, the bank wants you to lie, closing the deal and banking the commission is all that matters. Risk is offloaded to the Canadian Mortgage and Housing Corporation, or if a bubble pops, directly to the Bank of Canada who will take any risky mortgages off bank balance sheets, as demonstrated in 2008.
- ryanianian 9y agoI would re-phrase it as the classic lawyer advice - only talk when answering a question, and only answer exactly the question that was asked. For my case (parent post) this would have manifested as me just not asking about tenants, and if they brought it up as "are you planning to have tenants" I would say "No" (not "maybe" - no plan existed at that point!)