What do you guys make of this line in my affidavit of ocupancy in lender agreement? This is separate from the DOSC sheet.
Borrowers understand that in the event they have misrepresented their occupancy of the property, Lender may be entitled to receive from the borrowers an amount sufficient to reduce the principal amount of the loan to the maximum amount allowed for non owners under applicable regulations and industry guidelines.
Does this mean they could or may be able to back charge you at a higher interest rate, say a rate they may have given for an investment property if they find out you are renting?
An owner misrepresenting himself or herself would seem to be a grey area. If I purchased a home as a second residence and then decide to rent it out later on, how does this play into this. Any opinions appreciated.
<<Does this mean they could or may be able to back charge you at a higher interest rate, say a rate they may have given for an investment property if they find out you are renting?>>
That’s exactly what it means.
<<An owner misrepresenting himself or herself would seem to be a grey area. If I purchased a home as a second residence and then decide to rent it out later on, how does this play into this. Any opinions appreciated.>>
I would think that if you bought a property and used it as a second home and then converted it to a rental property after some time, then you’d have no problems with the lender. If however, you immediately (or almost immediately) put a renter in it, it would be highly suspicious.
The lenders are trying to protect themselves from loan fraud allegations. They shouldn’t have to – honesty is the best policy and your integrity should be your most prized asset (this is not directed to you mmas, it is general in nature!)…
Keith
Keith,
Thank you for your reply. We have owned the home as a second home and are not renting at this time but are entertaining the idea of renting weekly.
Disclaimer: I am not a lawyer and have never played one on TV!
If you’ve owned it a while, it should be no problem, especially if you can prove use as a second home. If you are uncomfortable, get a legal opinion from a lawyer…
Keith