Can I Rent My Home If I Have a Mortgage?

Many homeowners wonder about the possibility of renting their properties when they hold mortgages on the buildings. Homeowners who live across the Rio Grande Valley region plus other areas struggle to combine their passive income strategy with mortgage loan stipulations. The quick answer? Yes, in many cases you can rent out a mortgaged home, but it’s not quite as simple as putting up a "For Rent" sign. The first priorities you need to complete include steps to please your lender while protecting yourself from additional charges.

Let’s break it all down so you can get a clear idea of what to expect, what to ask, and how to make it all work like a pro.

Check Your Mortgage Terms First

Before listing your home or telling your cousin they can move in, take a deep breath and read the fine print. Different types of loans have their own rules when it comes to renting out a property. Conventional loans? Usually more flexible. Government-backed loans like FHA, VA, or USDA? There’s typically a time requirement for how long you need to live in the house before converting it to a rental.

You’ll want to look for any wording about "occupancy requirements" or "owner-occupant" clauses. These sections are key. Ignoring them could lead to something called occupancy fraud, which is a serious violation (and yes, the feds take it seriously).

Pro tip:

If you're unsure, give your lender a ring or schedule a meeting. Transparency can save you thousands in the long run.

Don’t Skip Telling Your Lender

Yup—you do need to let your mortgage company know if you're planning to rent out your house. Some folks might be tempted to keep it quiet, but that’s risky business. Your mortgage was probably approved based on the idea that you would be living there. Changing that setup without notice can breach your loan agreement.

Some lenders charge a small fee to switch your loan status, or they might require you to refinance into an investment property loan. It varies. Just keep them in the loop. It’s better than getting blindsided by unexpected paperwork—or worse.

Watch for HOA and Local Law Restrictions

If your home is part of an HOA, it’s time to check in with them, too. Some HOAs limit how many homes in the neighborhood can be rented out. Others might have specific requirements or waiting lists. Violating HOA policies can lead to fines or even legal action.

Then there’s local landlord-tenant law. Whether you're in McAllen, Mission, or anywhere else in the Valley, Texas law has specific rules around renting—security deposits, pets, notice periods, you name it. Be sure to brush up or get advice before you make your first lease agreement.

Rental Income? Sweet. Tax Consequences? Maybe Not So Much

Turning your home into a rental property comes with some nice perks—hello, passive income! But it can shift your tax situation. For example, if you sell the property later and haven’t lived in it for two out of the last five years, you might get hit with capital gains taxes.

If you’re in it for the long haul, that might not matter. But it’s something to think about—especially if you’re eyeing a future home upgrade or sale.

Set Yourself Up for Success as a Landlord

So, you've confirmed with your lender, cleared HOA rules, and read up on Texas laws. What’s next? Getting your rental game tight.

Here’s a quick guide to keep it running smooth:

1. Figure Out the Right Rent Price

Check what other properties are charging in your area. Use tools like rent comparison sites or grab a local market report. Set your price too high and your place sits empty. Too low? You’re leaving money on the table.

2. Collect Rent Online

Don’t waste time chasing checks. Use an app or online platform where your tenants can pay with a few clicks. It’s easier to track, and you’ll thank yourself during tax season.

3. Use a Solid Lease Agreement

A handshake won’t cut it. A lease written for another state won’t either. Make sure yours is specific to Texas laws and includes clauses for things like maintenance, late fees, and early termination. Want to make it foolproof? Use a lawyer-reviewed lease from a platform like Avail.

4. Plan for the Slow Seasons

There might be times when you don’t have a tenant lined up, or you’re doing repairs. Set aside 3–6 months’ worth of your home-related expenses so you're not scrambling to cover the mortgage, HOA, or property taxes.

Should You Refinance Before Renting?

Some homeowners choose to refinance before turning their home into a rental—especially if they’re trying to lower their monthly payment or switch to a fixed-rate loan. If your goal is to cash-flow the property more easily, this might make sense.

Movement Mortgage RGV can help you walk through the math and see if it makes financial sense. Our team knows the Valley market inside and out, and we’re always up for finding the best option for your needs.

Thinking About Renting Out Your Home?

If you're still wondering, "Can I rent my home if I have a mortgage?"—the answer is yes, but only if you do it right. The extra steps might seem like a hassle, but they protect your investment and keep you from running into problems down the road.

Whether you’re looking to build rental income, transition to a new home, or invest in property here in the RGV, we’ve got your back.

Movement Mortgage RGV isn’t just some random lender. We’ve been serving the Rio Grande Valley for years, and our mission is to keep homeownership smart, honest, and accessible. Our team knows the ins and outs of mortgages, rentals, and everything in between—because we live and work here, too.

We’re not just here to close loans. We’re here to open doors.