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Can I continue with owner-occupied refinance if need to relocate after closing?

My husband and I found out midway through our application to refinance on our primary residence that we need to relocate to another state for a new job shortly after we close on the refinance. Can we continue to refinance as owner-occupied, even though we will be moving out (we are days from closing and move in 2 weeks)? We will be renting a home in our new location for at least a year before buying a second home, and will rent out our current home (the refinanced property) starting a month after the refinance on the property is complete. We do not intend to sell our current home, and hope to occupy it again in the next 5 years.

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April 18 2012 - Tacoma
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........then your LO hasn't a clue.

Ask him for a copy of the deed of trust (security instrument) you'll be signing, here is the link, go to the one from your state..

https://www.efanniemae.com/sf/formsdocs/documents/secinstruments/


look at section 6(occupancy - 1 year) then read section 22 (acceleration - for breach of any covenant in this agreement)

Call the LO back, ask for a signed agreement by an officer of the bank stating the acceleration clause won't be enforced.

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April 18 2012
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Thanks for reminding me to follow up to this. You were absolutely correct. I sent the LO the deed of trust in Virginia with the occupancy clause and asked him to confirm that it would not be included in our closing documents. He responded with an apology that he had misspoken. The 12 month occupancy clause will apply. Therefore we are restructuring the loan as non-owner occupied. The interest rate goes up, but not significantly. And surprisingly the additional documentation that they require is not that onerous. However, we are only entitled up to 75% rather than 80%, and our income must cover both our first mortgage and our new rent payment. Therefore, our cash out amount will be significantly less than originally expected. However, I am relieved to have learned about this before we signed something without knowing what we were really being held to. Thanks to all of you in this forum for helping me get this resolved!
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April 24 2012
and the response was?
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April 24 2012
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Thank you - this is all good to know, but disturbing. I left a voice message for my loan officer asking for a copy of the security instrument as suggested in another reply. I referenced the Deed of Trust for my state with Section 6 requiring 1 year occupancy. I am eager to see what the response is and hoping that we have not come this far in the process only to have to abandon.  
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April 18 2012
When I asked if there will be a clause/limitations somewhere in our closing paperwork, our loan officer said no and in fact it is illegal for them to do so.

What we do after we close is not their concern.



Get the loan officers cell phone number. When the occupancy doc is put in front of you at closing, call the loan officer and say, I thought I didn't have to sign an occupancy disclosure. The "illegal" part of that statement is baffling. 
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April 18 2012
........then your LO hasn't a clue.

Ask him for a copy of the deed of trust (security instrument) you'll be signing, here is the link, go to the one from your state..

https://www.efanniemae.com/sf/formsdocs/documents/secinstruments/


look at section 6(occupancy - 1 year) then read section 22 (acceleration - for breach of any covenant in this agreement)

Call the LO back, ask for a signed agreement by an officer of the bank stating the acceleration clause won't be enforced.

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April 18 2012
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Thanks for the helpful feedback! Per your suggestions, I called the bank this morning and they said that we can do whatever we want with our house as long as nothing has changed from our primary residence status as of the date of closing. We are fortunate, as our employment status has not changed and we will occupy the house up through the closing date. When I asked if there will be a clause/limitations somewhere in our closing paperwork, our loan officer said no and in fact it is illegal for them to do so. We only have one residence (versus multiple investment properties), and the application confirms this. What we do after we close is not their concern. However, I'm sure it varies depending on the situation, and I am very glad that I talked with our loan officer, particularly since we are new to this process and it's just not worth the risk. I would suggest that anyone in this situation do the same.
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April 18 2012
Ditto to what Clay said, and add that Deed of Trust will likely have clause that indicates you will occupy property for one year. Lender is likely to do a verbal verification of employment, that could result in disclosure of your employment status having changed.  If you have 25% or more equity and strong credit score, a non owner loan will be very close to occupied loan rate. You will have to qualify with current payment and new rental payment.
With all of that said, do the right thing and discuss new employment development with your lender, and don't proceed with a owner occupied loan in any event. The consequence could be severe.
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April 18 2012
You should disclose these facts to your lender today. You will sign an occupancy disclosure at closing so if you sign that saying you intend to occupy the residence and you do not it is considered occupancy fraud. FYI, many lenders do a post closing occupancy check.   
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April 18 2012
 
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