Profile picture for Bergen_NJ

3890 second home rider

Is this rider means the borrower cannot rent the second home for the duration of the mortgage.  It would be a long time if it's a 30 years loan. 
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April 29 2010 - US
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Answers (3)

Profile picture for nobodyshome
Old thread... but new questions...

Assuming a purchase of a second home... If the primary residence is then sold, and you move into the second home, that seems to read as a violation of Section 8 of the rider since you declare your intended use of the property as a "second home" (as opposed to a Primary Residence).

This rider was "sprung" on me recently.  It REALLY seems poorly worded.
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September 03 2012
Profile picture for Bergen_NJ

The second home rider over ride section 6 which stated "Borrower shall occupy, establish, and use the Property as Borrower's principal residence
within 60 days after the execution of this Security Instrument and shall continue to occupy the Property as Borrower's principal residence for at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent shall not be unreasonably withheld, or unless extenuating ircumstances exist which are beyond Borrower's control."

Sound like the borrowers can change their mind once they occucied the house for mininum of one year.  But the second home rider didn't have any timeframe.
Is the "intention" is industry standard?

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April 29 2010
Please take note of the following-  Your intention must be not to rent your home-  i.e.-  Say you bought a primary home and 2 months later you hit the lotto, changed jobs, got married and moved into a home your wife owned, got sick and needed a home with 1 floor as your current home has 2 floors, etc-  Even though this is your primary home, you are then allowed to rent it out if you moved-  Your initial intentions must be to keep the home as the primary when you bought it- Again, it is what your intentions are at the time of purchase-  The same holds true for 2nd homes-  Say you bought a place by a ski resort as you love to ski and planned on doing so every winter-  Say time goes by and you now love Scuba Diving-  You cannot stand the cold-  No one if forcing you to keep this home as a 2nd home- (Vacation Home)-  You can even sell the home if you wish-    If your intentions at time of closing and purchase was to have this as your 2nd home then if things change in the future, you can in turn rent out your home.  The opposite holds true as well-  Say you bought an investment property, no one can stop you from then moving in and making it your primary-

Please consult with your lender and go over there specific guidelines-  See below as well.

Borrower shall be in default if, during the Loan application process, Borrower or any persons or entities acting at the direction of Borrower or with Borrower's knowledge or consent gave materially false, misleading, or inaccurate information or statements to Lender (or failed to provide Lender with material information) in connection with the Loan.  Material representations include, but are not limited to, representations concerning Borrower's occupancy of the Property as Borrower's second home.

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April 29 2010
 
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