Mortgages are complex agreements, as might be expected from loans that last decades and involve hundreds of thousands of dollars. Although the bank owns the deed on your home, you are assumed to have all the rights and responsibilities of the owner in terms of most of what you choose to do with the land and home. How a tenant interacts with your mortgage depends on some circumstances of the mortgage itself.
Qualifying for the Mortgage
Your debt-to-income ratio is one of the chief factors in approving or disapproving your application for a mortgage. This means that the more you make as compared to your monthly debt payments, the more likely you are to be approved for your mortgage. If you can demonstrate reliable rental income, this increases the "how much you make" side of the equation. This is often easier to do with a refinance, as you can establish a history of having rented a room in that house.
Primary Residence
Mortgages divide homes into primary residences and secondary residences. A primary residence is where you personally live year-round. Secondary residences include things like summer homes, beach houses and rental properties. The down payment, points and interest rates are likely to be higher on a secondary residence. Renting out a room doesn't normally change the status of your home, but you should review your mortgage paperwork to confirm this.
Homeowners Insurance
A mortgage almost always requires that you carry sufficient homeowners insurance to protect the collateral on the loan. Some homeowners insurance policies specifically exclude damage caused by renters, requiring you to purchase additional insurance if you take on a tenant. If that's the case with your policy, you might be in violation of the insurance clauses of your mortgage.
Common Sense Caution
Mortgage law is highly complex, and the consequences of making a mistake are potentially catastrophic. Always defer to the contents of your mortgage contract if you have questions about taking on a tenant. If you're not 100 percent certain you understand the contract in context of renting out a room, check with a lawyer who specializes in mortgage law.
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