Would anybody get an owner occupant loan for an investment property and say you are moving to get 100% financing then put bills an your name “then change your mind and decide to rent it out” and not worrying about getting in trouble with the law. I am just curious about this because I do not want to do something that could get me in trouble. I have heard many different opinions on this. maybe an attorney could give me some input.
Not a good idea you would be committing mortgage fraud which can get you prosecuted under federal bank fraud statutes. Hardly worth the risk simply to get an extra 10% LTV financing and a modestly lower interest rate.
If you’re asking about it now, you’re contemplating it and it’s just plain wrong. OO loans are for OOs and NOO are for NOOs. Pretty simple.
Personally, I would not knowingly do business with someone of such loose moral fiber. But that’s just me.
My two cents.
You will have to sign a form that states you plan to occupy the home within 30 days of closing. If the lender finds out you are not occupying the home they can call the note due immediately. What you could do is look for a duplex which would allow you occupy one side of the property while renting out the other. Starting your REI career with fraud is a very bad idea.
DO NOT DO THAT!
WHEN YOU WENT TO THE CLOSING TABLE YOU SIGNED A NOTE THAT STATES IF THE PROPERTY ISN’T OWNER OCCUPIED THAT YOU WILL NEED TO INSTANTLY REFINANCE THE PROPERTY TO A NON OWNER OCCUPIED HOME.
ALSO, IF YOU LIVE IN THE HOME AND TRY TO PURCHASE ANOTHER HOME FOR YOU TO MOVE INTO…LENDERS TYPICALLY WONT CONDUCT THE DEAL UNLESS THE NEW HOME IS MORE EXPENSIVE THAN YOUR CURRENT HOME…OR YOU’LL HAVE TO SELL YOUR CURRENT HOME FIRST THEN BUY THE NEW HOME WHICH IS LESS EXPENSIVE.