Welcome Home Loan

[Staranais]

Hi there,

I'm hoping someone on this forum knows a bit about Welcome Home Loans with regards to investment property.

I have a property that I bought 14 months ago with a Welcome Home Loan. I've got about 10% equity in it now.

After living in the house for 9 months, I was offered a years work contract in another city, so I made arrangements to rent my home out privately. I understood that was acceptable under the terms of the Welcome Home Loan, because I originally bought the property for the purposes of living in it (and did, in fact, live in it for 9 months before I got a new job, and may live in it again if I move back to the same city).

However, I've just had a very irate phone call from my bank, saying that they have discovered I am renting the property out, and I am breaching my loan conditions, and may have to refinance or sell.

Can someone shed some light on this? Am I definitely in the wrong here? If so, what are my options?

Cheers,
Rachel

[Craig Pope Mortgages]

Hi Rachel, its difficult to see on the website what the set time period is that you have to live in the house. I think refinancing would be the way to go but I would ask your current bank to provide you with the rules pertaining to them specifically and WHL. Plus obtain in writing what the time period of minimum owner occupied was (did they explain that at the time of taking on the loan which they should have). It seems a bit harsh given you have moved out for genuine reasons.

[speights boy]

^
Perhaps their gripe is the lack of prior discussion.
I would have thought the WHL would be in one category for their RBNZ LVR disclosure requirements, and now it's an investment it may well be in another.

This would have caught the bank unawares due to lack of notice from the borrower.

Surely the actual mortgage T & Cs would include this situation and borrowers responsibilities.

[BigDreamer]

I don't think it is a problem for your to rent it out given that you lived in the property for the minimum duration set up. However, I believe the interest rates would now change given that it is now being considered as an investment with >80% lending.

[klauster]

Banks have rules no hearts.
Refinancing shouldn't be a problem, you already own the title, have cash-flow by tenant and job, possibly need to increase the deposit, good luck

[Bluekiwi]

Tell the bank to get lost, you have the house you have the loan and you are paying them, what are they complaing about and what can they do.

Take your specific details to a good mortage broker and he will sort it out, you shouldnt be dealing directly with the banks yourself anyway, as you dont know what you should be getting from them as of right, and they dont always give stuff out unless you ask for it.

I suggest Mike Kingston of Mike Pero Mortgages.

[speights boy]

It would be good to get some feedback on this from Staranais.