Hello, I am new to this so please bear with me.
I am planning to make an offer on a duplex. The mortgage broker tells me that the interest rate is different if I buy the duplex as pure investment…10% down and 5.25 interest. However, if live in one unit and rent the other, I can simply put down 5% and get an interest rate of 5.25.
I have not decided if I want to live in one unit and rent the other. If so, I will not be able to move in until at least end of the year due to my current lease on the apartment that I live. Will the bank allow me the lower rate/lower downpayment if I do not move into one unit right away or will i be forced into the investor rate/downpayment?
Any help is appreciated. By the way, the property is in PA.
If your intention is to move into the unit then you can get the owner occupied rate. The problem may be that you will be paying mortgage and rent.
If that is not a problem then you can do the lower rate. You might want to talk with your property manager/landlord and ask if there is a way you can get out of your lease earlier since you are purchasing a home.
I would draft a letter to the landlord stating that I plan to move into my own home and request to be let out of your lease.
At best the letter will document your intention to move into the home and will provide the lender with your written intention
Congratulations on your purchase, that’s a very savy move.
Actually, the rate’s the same, only the downpayment is different.
As Gina indicates, landlords often look favorable on folks breaking a lease to become a homeowner – the worst they can do is say “no”.
If you do live in half, remember the tax treatment is different fo both sides – it’ll be like owning two separate places.
Sorry, I meant the lower downpayment. thanks