Invetment or personal residence?

Hello !
As far as I know mortgage interest for investment prop is higher then for personal. I do not own a personal residence.
So may I buy a prop as for my personal residence but never live in it using personal res interest rate? Rent it or do preconstruction and sell for profit? I do not know if that is a mortgage fraud and if it IS, then what are the consequences. But lets say my goal WAS to purchase a personal residence and move out of state, but then I changes my mind? This is a real life situation that can happen to anyone. Any input welcome. Thank you very much all!

Howdy Katusha:

I will come visit you in the big house. You know it is wrong. Do not do it.

Your lender’s mortgage package usually has an affadavit that states you will occupy the residence for at least a year, maybe more, depending on lender. Breaking that term would be a personal choice.

Most people will tell you that there will porbably be no trouble if you keep the mortgage paid. They are probably right but that is no guarantee.

Sure a person can get relocated and have to move. It happens.

i bought my first investment property with an owner-occupied loan, and havent had any trouble since

Unless it is a HUD foreclosure purchased as home owner, you should be fine. You can always change yourmind and not live in the house even if you did not move in it. The issue rises if it goes into foreclosure, then the bank may come after you if not mistaken.

as someone told me along time ago, there is no mortgage police checking to see if your living there. You should be ok doing your 1st home owner occuppied, because in your you have the intent of moving in there when the time is right.

I personally think everything you do should be above board. Whether you can “get away with things” shouldn’t matter. I’m sure you could get away with this, but I personally think its unethical to know in advance you will be doing something that isn’t right.

On the contrary there are ‘mortgage police’. They randomly check the land records to see if there is a seller involved 2nd mortgage added to a property within a certain period of time after the original mortgage.

This applies to loans where the lender has not authorized a mortgaged down payment and closing costs. Obtaining a 2nd from a non seller related source should not be a problem.

If you get a mortgage as an investment property, you will have to pay alittle higher interest rate. But it’s not a huge difference, and you get to write off the interest at the end of the year, so why lie about it?

just dont use an fha loan. i know someone who was caught renting a house they bought with an fha loan. they were fined something like 3000.

Listen to yourselves! Debating as to how far you can screw your lender over for a couple of bucks a month and not get in trouble for it.

Listen to TedJr and Bobo…Be honest. It’s not necessarily about the risk, it’s about what price you place on your honesty and integrity!

My integrity is not for sale.;action=display;threadid=12993;start=msg60311#msg60311


I think it was more of a requst for information than an ‘intent to screw’.

I can see where this can get confusing to a new REI.
To inexperienced people a mortgage is a mortgage. It is easily understood as a vehicle for borrowing money. The variety of types of mortgages and their terms, can be daunting.

Be ready to room with Bubba.

Well thank you for all your replies. My intention is not to screw, but to figer out how to go about mortgages. 1 reason IS to try to save money, ANOTHER one IS that I want to buy a prop out of state but unsure about moving there (I can not afford a house where I live). I am happy that some people were able to undertand where I am coming from