Owner Occupy

How long does a person have to live in a house purchased owner occupied before they can move on? If you know please add any advice as to the hows and whys and prepayment penalty etc
thanks

Comments(4)

  • jerry555th August, 2004

    sorry I should have mentions I would keep the house as a rental, just move to a different house

  • roztom6th August, 2004

    Unofficially: 1 year. It also depends on the lender. FHA not good to play with.

    When you change the insurance is when the lender is tipped off. I've never heard of a problem after a year. However, you might want to set up LOC's before moving while it is still owner occupied.

    This is not to be construed as advice. You should seek the appropriate counsel.
    [addsig]

  • dosentoski11th August, 2004

    If you don't live in them, does this mean that they are 100% homesteaded. Is insurance setup as non-owner occupied? You must use a different lender every time or something because mine said this cannot be pushed through the desktop underwriting....hum. Anyway, thanks for the tips.

  • DecisionMan11th August, 2004

    Homestead usually applies to just one home, the owner-occupied home.

    Mortgage application states you have an "intent to occupy" the home, and at closing there is an affadavit indicating you intend to occupy the home.

    FHA/VA audits will expose the non-owner occupancy and if in the first year you're caught the loan will be called and likely be ruled inelible for future FHA/VA deals.

    Conventional conforming mortgages have a 1 in 10 chance of being audited. Tipoffs are changes in payment coupon mailing addresses, or insurance changes.

    Certainly you'd need to change your hazard insurance coverage if the home turns into a rental.

    The reference to Desktop Underwriting is to the automated underwriting systems of Fannie and Freddie. Basically this means conforming loan terms, and non-owner occpied conventional loans have larger downpayment requirements and slightly higher rates. If your mortgage broker is using automated underwriting to get a 100% loan, it must be an owner-occupied status.

    So if they've already sold a conventional conforming loan to a lender as owner-occupied, it would be a problem to do another owner-occupied loan to you through the same lender.

    Non-conforming lenders have 100% non-owner occupied loans if the credit scores are good with full documentation. Many of these don't have a limit on the number of mortgages they'll do to one person. Of course, the rate will be a little higher than a conforming loan, but no fraud is involved and no looking over your shoulder.

Add Comment

Login To Comment