This thread has taken some really odd turns.
1. Unless you have a really low mortgage, you are highly unlikely to move into a higher tax bracket by claiming rental income. You claim the rental income as income. You claim the interest paid on your mortgage, as well as any expenses (e.g. maintenance, commissions paid to rent it out), as well as depreciation, as losses. For most people the loss showed will exceed the rental income. This is true for me even though I am clearing about $200 a month on the rental.
2. If you make less than 150K you can deduct the 'loss' mentioned above from your income- giving a dramatic tax benefit to owning rental property. If you make more than this you can carry forward the loss to the next tax year.
3. When we started renting out our condo we didn't report it specifically to the mortgage company. However we used the same lender for the new property and gave them a signed statement that we intended to rent out the condo. This didn't change anything about the condo mortgage.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Your mortgage holder may not approve.

Our neighbor tried to rent out his house and the mortgage company said no. He ended up selling.

Really?! I've never heard of this. Under what legal authority do they do this? I don't remember ever signing any language to this effect in either of my closings.

It's standard in all the Virginia closings I've had.

Maybe? I've never lived in VA, but DC, MD and NC and have never seen this.

Live in DC. My mortgage documents say I cannot legally transfer the mortgage from myself to another person on a term basis. If I do my entire mortgage becomes due. So maybe the neighbor tried to transfer the paperwork of his mortgage to his rentee? Otherwise why would the mortgage company even be in involved? Unless the guy was going into foreclosure or a short sale of somekind.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Your mortgage holder may not approve.

Our neighbor tried to rent out his house and the mortgage company said no. He ended up selling.

Really?! I've never heard of this. Under what legal authority do they do this? I don't remember ever signing any language to this effect in either of my closings.

It's standard in all the Virginia closings I've had.

Maybe? I've never lived in VA, but DC, MD and NC and have never seen this.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Your mortgage holder may not approve.

Our neighbor tried to rent out his house and the mortgage company said no. He ended up selling.

Really?! I've never heard of this. Under what legal authority do they do this? I don't remember ever signing any language to this effect in either of my closings.

Many /most mortgages include language that the home is owner occupied.

WTH? I used to work at a mortgage company, then an investment buying mortgages on the secondary loan desk, and have also rented out my own house. I've never heard or read this in a conventional mortgage. You do have to tell your insurance company though.

Anonymous wrote:I just looked up the income level at which you can deduct rental losses. It starts to phase out at $100k and is completely gone at 150k.

This doesn't make any sense. Our HHI is $450K and we deducted all loses.

Anonymous wrote:

Anonymous wrote:If by under the table you mean:

1) Not report the rental income
2) Claim the mortgage interest deduction on your house as if you were still living there.

These are absolutely tax fraud and illegal.

I think you could get away with this if you worked reasonably close to where your house is. If you and your spouse are across the country and try to claim a house here as your primary residence then the IRS might ask questions.

How sad...and we wonder why the housing market collapsed 8 years ago. For ever liar loan, there was a liar.

Anonymous wrote:

Anonymous wrote:Your mortgage holder may not approve.

Our neighbor tried to rent out his house and the mortgage company said no. He ended up selling.

Really?! I've never heard of this. Under what legal authority do they do this? I don't remember ever signing any language to this effect in either of my closings.

It's standard in all the Virginia closings I've had.

Anonymous wrote:

Anonymous wrote:Your mortgage holder may not approve.

Our neighbor tried to rent out his house and the mortgage company said no. He ended up selling.

Really?! I've never heard of this. Under what legal authority do they do this? I don't remember ever signing any language to this effect in either of my closings.

I'm PP with a legal rental property. More likely, the mortgage company/ bank wanted to raise his rate or refinance (rental property mortgages are higher interest than residence ones) and he sold instead.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:What does your mortgage company have to do with renting your house? It's your house, not a condo.

The rent is definitely considered income, however, you can deduct a ton of stuff like management fees, repairs, anything. We did it for 3 years when we moved. It wasn't bad on our taxes. It actually helped a little b/c we wrote off so much stuff.

We definitely used a management company though. It helped significantly.

Don't cheat on your taxes. Do it above board and after depreciation and other deductions you'll probably come out ahead.

This.

-mortgage lender

When I inherited a house, I had to get a rental mortgage since someone was still living in it and paying rent. I come out way, way, way, WAY ahead after depreciation, deducting taxes, mortgage, all expenses even after declaring rental income.

You have to make a relat Felt low income to deduct anything above rental income on your taxes. It used to be $100k unless you were in the real estate business. Most people in this area are wel above that.

I'm PP. I don't know what the above means, but I did/ do make a relatively low income compared to people in my area (not DC, NYC suburbs). I've never made anywhere close to 100k. I don't mind though, it all works out.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Your mortgage holder may not approve.

Our neighbor tried to rent out his house and the mortgage company said no. He ended up selling.

Really?! I've never heard of this. Under what legal authority do they do this? I don't remember ever signing any language to this effect in either of my closings.

Many /most mortgages include language that the home is owner occupied.

I thought this was only for the first few years. I don't think you have to refinance for a rental property, but trying to claim a mortgage interest deduction and fudge about your residence is sketchy.