Originally Posted by dunroving

This really applies to anyone who moves overseas, but I can't see a Forum that is for general issues re: moving overseas.

Some of you may know I'm trying to get back to the US but, besides the lack of job opportunities, an increasing worry is the UK housing market - either I will have difficulty selling, or would have to take a big loss (£40k+ and growing, which is a big amount for me).

Consequently, one possibility is to rent out my house if I move back to the States (would much rather not, but that's a different story).

I'm wondering, for those who have found themselves having to rent out their UK house, how did the mortgage company respond?

Back in the 80's I seem to recall they really didn't care as long as the mortgage was paid.

Then, in the late 90's, banks seemed to expect you to ask for permission to rent your primary residence while it was mortgaged, but didn't expect much else. Then they seemed to want to charge you a considerable sum for the permission to rent letter.

More recently, though, I have heard of banks requiring people to change their mortgage either to a buy-to-let, or some sort of hybrid right-to-rent mortgage (usually with a huge fee and less favorable terms, like higher interest).

Any experiences with this? I'm concerned I may not be able to take a US job offer simply because I'd be throwing away all the capital in my house (the result of years of saving, not from capital appreciation).

Interested to hear about people's experiences, especially recent ones.

Originally Posted by heantune

I moved to the US in 1995, and have been renting out my house since then. I sent my mortgage company a letter when I left telling them what I was doing. If I recall correctly their rule at that time was that you could be away for 3 years and they would still look at it as a normal, residential mortgage. The mortgage is direct debit, and house has always been occupied with renters, so never any payment problems.

However, last year I moved in the US and sent them a letter telling them my new address (not the first time I have moved). This time they noticed how long I have been away and got a bit stroppy about it.... They insisted that I needed to change it to a buy to let, but that they didn't have that kind of product available, so I should do something about it. By that time it had been 13 years so can't complain.

So.... it was a pain arranging a new buy-to-let mortgage last year. All the companies were very reluctant to write any new policy in 2008-9. But eventually my broker found a good deal and it's all sorted out now with a very nice low rate.

My advice is
1. MOST IMPORTANT - have a professional management company handle everything. It costs 10% of the rent but it's worth it!!
2. Contents insurance - make sure you get a policy that covers the contents when you rent it out. There are insurance products designed for this.
3. Building Insurance - you need to notify them what you are doing, i.e. renting it out, so that they don't have excuse to cut you off if anything happened..
4. Mortgage. Don't know how long you can keep a standard mortgage if you are absent, and renting these days. Maybe someone else can comment on current practice.
5. After all this time away, eventually I am going to have a big tax issue down the road if/when I sell - but that's a problem for another day...

I can recommend renting (with a good professional agent in the UK), the rent pays the mortgage and you don't need to worry about it at all. Occasional maintenance $$ are required. Best of all you can deduct all your mortgage interest, maintenance, service fees, insurance, depreciation etc. as business expenses on your US Tax Returns. Very cool!

H

Originally Posted by pcmaccallum

Hi we moved to Us in January this year and have rented out our house in England. We contacted the morgage company they gave us permission but charged us around £250. We only have a small morgage left on the house and it finishes Nov 2010 i dont know if that makes a difference.
Chris

Originally Posted by pcmaccallum

Hi we are letting our house back in UK because of the housing market. We moved to US Jan this year. We have our permanent resident cards. We are paying tax on the house via our letting agent not sure if this is the best thing to do because we can get exemption with us being out of the country. We just thought it would be better to pay it so we dont get a big bill from them later. Can you tell us what we do on our UStax form, do we have to pay again? how do we declare it. We have not had to file a US tax form yet so dont know anything about them. We never had to fill one in in the UK so are very green about such things. Any information would be a great help.

Chris