Lenders Says Property Must Be Owner Occupied
I have a lender that says in order to qualify for a line of credit or a mortgage against my investment property. It must be owner occupied. What is owner occupied to a creative investor anyway? My questions is can i do a lease option or a wrap around mortgage to get around this lending policy? If not what do you guys recommend? :-o
Find a new lender
lying and committing fraud are not same as being creative. The property that you are not living in is not primary. It is most likey your investment property, if not 2nd home. If you want to get equity line on your investment prop, most cases you have to have pretty good credit score and LTV has to be lowl
Why is it not clear to you? You should know where you live. :-?
not saying that it is right in anyway but people can do business however they want. Do you speed in your car? have you ever? You may never get caught and maybe you will. just because it is against the law does that stop you from doing it? The point is, is that some things are more serious than others and even getting "caught" may not be a big deal. Again, not saying that what he did is right and a light penalty. but laws can be challenged. You just need to be aware of what you are doing and look at the possibility of getting caught and decipher for yourself if its worth it.
Not all, but most mortgage brokers are pretty twisted and i know that i as well as other people would not be where we were if it wasnt for twisting the rules a little bit. example (using FHA with full intentions of not living there)[ Edited by ryand on Date 03/07/2005 ]
I give up! Commit fraud if you want to. Read the loan docs! This is not a grey area at all.
A proper answer to your question however, would be that a lease/purchase, or a wrap, or sub2 purchase are possibilities to avoid committing loan fraud to acquire the property.
Posted: 20:34 on 03-06-2005
QUOTE - "Do you speed in your car? have you ever? You may never get caught and maybe you will. just because it is against the law does that stop you from doing it"
I have never gone above the speed limit in my car! thats obsurd that you would even propose such a thing. i take offense by your promotion of driving over a safe speed. in fact i wont even drive a car any more because of people like you. i roller blade every were i go.
im sure..you cant even afford rollor blades because you have only done 1 deal
yes but how is a broker to know weather an investor will actually live in the house or not? or only live in it for a few months before lease optioning it away? when i was actually trying to get loans for a investment property, i asked a broker about just getting a owner oc. loan and then changing my mind and selling it instead of living in it. he said that since if you already have a primary residence you cant get another owner oc. loan. so maybe some are willing to bend the rules but i havent found it to be that way.
oh and not only do i have rollerblades but i found a razorscooter in one of the properties i was working on. now i use this for my main source of transportation.[ Edited by ZinOrganization on Date 03/08/2005 ]
quote:yes but how is a broker to know weather an investor will actually live in the house or not? or only live in it for a few months before lease optioning it away?
It is all about your intention. When you buy it, you have intention to "change your mind" to make it an investment property after living there for a few months as your primary, it is not goint to cut it. If you currently have a primary, you have to tell the broker or lender what you are going to do with the primary. It is actually part of 1003 application.
I am not lecturing anybody. By the way, I am an investor too. Nothing wrong with making money as long as you are doing so legally.
if you dont do it legally does that make you a bad person? just a question
well said! You can only go so long before it catches up with you.
question:
If you dont do it legally does that make you a bad person? just a question
Answer:
It makes you a criminal.
Clay,
The lender usually looks at the case like this as her 2nd home. 2nd home is still considered owner occupied. When you get a conforming loan for your 2nd home, same criterion for primary apply (LTV, rate, and so on)
2nd home are consider still considered owner occupied, as are vacation homes. However, I assume you need to live thier for some part of the year - correct?
I was looking at vacation homes, will get owner occupied finaincing - but I was going to vacation their several time a year. Rent it out the rest.
back to the original scenario.
You put a lien on a property for work you either did or didnt do. Put it this way. say you sign a contract and start doing some work on the house under the owners permission. You tear up some walls and start with the work. the owner doesnt pay you because you havent closed yet and you lien the property and get the money at closing.
First, the house meets the LTV for the abnk and it has a lot of equity in it so the bank isnt over leveraged
second, You are paying the money back,
third, My broker even asked a lender about it and they said it was okay just make sure the lien is on before you close. Is it okay if the Lender says it is????