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Questions about renting out your house...


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Ok, I'm considering renting out my house to a family member for a year to help me facilitate some things.

 

While we would have a formal contract and cover all the legalities of it, it would be pretty hush hush from that, payment in cash, with a receipt given at time of payment.

 

Basically I'm helping her out and she's helping me out, but I do NOT want to cause ANY ISSUES with my mortgage company or homeowner's insurance.

 

I've reviewed my mortgage documents and I could only find two papers regarding occupancy, and both stated that I only had to occupy the residence for AT LEAST the first year, which I have since I'm going on my third year here, nothing else mentioned in regards to renting or whatnot.

 

So does that mean I'm in the clear? Because I've heard/read about stories where people are renting their house out and their mortgage company finds out and they call their mortgage, meaning they have to pay it off in full, not something I want to do because I have an awesome rate and am fine with my current mortgage.

 

So, any real estate people here, or mortgage people or lawyers?

 

Basically I don't want to do this and have it backfire on me, I'm doing it to give someone a place to live for a year, and to save myself about $12,000 so that I can pay some shit off and save some money.

 

Thanks

 

Edit: I don't really want to call my mortgage company quite yet, I'm trying to get an idea beforehand.

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I would not be concerned with this in the least. Your renting to a family member. 1. who would find out? 2. Well 1. pretty much takes care of it. A stranger maybe but even then I wouldnt be concerned. If it comes out that shes paying you cash, well certainly an adult member of a houshold should contribute. I would say your bigger issue would be from a neighbor who gets pissed off theres one less parking spot on the street and complains about multi-family occupancy but even that is far-fetched and wouldnt carry any weight. Either way your not renting out your house.
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I wouldn't be living there at the same time, not sure if you understood that from my post because of your last statement.

 

No concerns of neighbor complaints, I'm friendly with all my neighbors and have my own driveway/garage. I would even make them aware of the situation beforehand because we're all cool.

 

The family member is an older lady, so I doubt she's going to be causing any ruckus, lol.

 

Cash is how I will be paid, so that I can pay my mortgage, I just wanted cash so there wasn't any traceable stuff, just in case even though according to my documents I'm fine.

 

Thanks for your input.

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I was still thinking about your first thread regarding renting out your upstairs and just mingled the 2 when I was posting. I still wouldnt be concerned. There is no way for anyone to find out, nor any real way to prove it if they did. I really couldnt see a mortgage company enforcing the rule of full payment in this market if in fact it were true. Why not just call the company, tell them you are considering a loan and wanted to know what their policy is if in fact you were to get a loan and decided awhile down the road that you may allow one of your relatives to move in if you should want to. That way they dont know you are already a customer.
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I may do that, I just didn't know if it varied on different loans/whatever, I mean I have a conventional 30yr fixed, but who knows. I'm sure I'm worrying for no reason, because as I said I looked through ALL my paperwork from closing and only found that one note about occupancy restrictions.
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Are you leaving the country? Might need to do a power or attorney with someone you trust to take care of the home if you are super far away.

Otherwise there should be no problem. Looks like you have things ok. It is not like you are renting it out to multiple families which would violate zoning issues.

A family member, mature, cash, it will not be a problem.

I would check on the insurance thing. They might need renters insurance on top of your homeowner's.

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