Hi, I am fairly new to REI. I had a home which was my primary residence, but now i wish to put it up for rent. However my mortgage company will only do primary resident mortgaging. Are there specific bank types that can refinance the home for my purpose, or is it just a matter of finding the right bank? Any thoughts will be much appreciated…
Welcome!
Smaller local banks will usually specialize. Try some of the larger banks, Wamu, Wells Fargo, etc to gain a larger selection of options.
If it is your currently living in it and have finanacing, you do not have to change that. Is that the circumstance?
Keith
Hi
Keith has it right, is there a specific reason that your wanting to refinance the property, if so then I can answer your question. But if your thinking that you need to refinance it just to make it a rental property then you dont have to do that, there is no rule or law that states you need to refinance if your taking your primary and turning it into a rental property.
If you are doing the refinance because you can get a better rate even though your going non-owner occupied, or your pulling cash out to buy the next primary residence, then there are a few guidelines to consider.
This would put you in conventional type financing, Fannie/Freddie as you cant do a non-owner on FHA. The guidelines had adjustments made to them awhile ago to prevent people from leaving their primary (except for under certain conditions) to turn it into a rental and going to buy a new primary. The reason for was there were a number of people then walking away from their old primarys after financing the new one.
So here is the requirements. Using a Fannie/Freddie loan to buy the new primary, you must then have 6 months reserves for both the new primary and the rental. That being said, if your refinancing to get the cash out for the down and closing cost, you must also consider the reserves that you will need to complete the purchase.
Oh ok. I had no other reason to refinance what yo. I just thought i was in the wrong. But seems from what you’re saying, I do not need to refinance because my property is no longer my primary residence. Right? Thanks so much for the quick feedback.
Here is the only guideline that would apply to what you wanting to do, and that is if you take out a loan as owner occupied, you must occupy that home for 1 year from that point. After the year, if you are wanting to convert it to a rental property, there would be no issue what so ever, your free to do that.
I hope this helps.
Yes that helps alot thankyou!!! :biggrin