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Answers (12)
- Norm D Plume, "America Needs Nixon!"
- Contributions:1670
simple solution, ask the LO at USBANK to send you a copy of the deed of trust they'll be having you sign.
If the 12 month rule is on there it'll make for a nice conversation.
If the 12 month rule is on there it'll make for a nice conversation.
- kjsimpson27
- Contributions:5
Thank you everyone!
I stated earlier, if we find out that having to live here another 12 months is indeed the deal, we just won't refinance right now, but instead, make an offer on another home and go from there. The new home will become our primary residence and then we will rent this one out, refinancing at a later date as an income property. However, we're currently at 5.875% and I'm not sure it would be beneficial enough to pay the necessary costs to refinance at a rate higher than the 4.6% we were offered....I know it will be a bit higher due to it being an income property.
I came here asking for clarification, not trying to get around the rules/law. The lender on our re-fi even said we wouldn't have to live here for 12 months. I was hearing the contrary from other lenders, so it started to make me nervous. Again, I never had intentions of doing anything illegal. My intentions are to find a definitive answer. Not so easy to get it seems.
I put in a call to the lender (US Bank) this morning asking to clarify that this is indeed a HARP2 refinance and what the rules are. My husband is starting to wonder if it's another type of refinance since the lender specifically told us the 12 month rule didn't apply. She said it was a 30 year conventional loan, just like we've had from the beginning.
We can afford the 2 house payments either way, we just want to know the facts so we can move along in one direction or another.
I stated earlier, if we find out that having to live here another 12 months is indeed the deal, we just won't refinance right now, but instead, make an offer on another home and go from there. The new home will become our primary residence and then we will rent this one out, refinancing at a later date as an income property. However, we're currently at 5.875% and I'm not sure it would be beneficial enough to pay the necessary costs to refinance at a rate higher than the 4.6% we were offered....I know it will be a bit higher due to it being an income property.
I came here asking for clarification, not trying to get around the rules/law. The lender on our re-fi even said we wouldn't have to live here for 12 months. I was hearing the contrary from other lenders, so it started to make me nervous. Again, I never had intentions of doing anything illegal. My intentions are to find a definitive answer. Not so easy to get it seems.
I put in a call to the lender (US Bank) this morning asking to clarify that this is indeed a HARP2 refinance and what the rules are. My husband is starting to wonder if it's another type of refinance since the lender specifically told us the 12 month rule didn't apply. She said it was a 30 year conventional loan, just like we've had from the beginning.
We can afford the 2 house payments either way, we just want to know the facts so we can move along in one direction or another.
- sunnyview
- Contributions:25139
I was offered HARP on my house to lower my payment/interest rate with no money out of pocket and no escrow. I couldn't save money any faster than signing the papers and adding the savings to my saving account.
The papers that I signed said that I had to occupy immediately upon close of escrow (not a problem because I already lived there) and remain in the house as my primary residence for the following 12 months.
I do not think that needed a larger house for your family will guarantee you that the lender will sign off on your renting it out. Do not count on that or you may run into trouble. I would do it differently. Maybe you could plan on staying in your house for at least 10 more months before you look for another house. That would keep you out trouble with your lender, allow you to get an owner occupied rate on both houses and time to save for the reserves that you will need to show your lender to qualify for the second property.
The papers that I signed said that I had to occupy immediately upon close of escrow (not a problem because I already lived there) and remain in the house as my primary residence for the following 12 months.
I do not think that needed a larger house for your family will guarantee you that the lender will sign off on your renting it out. Do not count on that or you may run into trouble. I would do it differently. Maybe you could plan on staying in your house for at least 10 more months before you look for another house. That would keep you out trouble with your lender, allow you to get an owner occupied rate on both houses and time to save for the reserves that you will need to show your lender to qualify for the second property.
- John Conklin, "203K Alternative"
- Contributions:130
Refinance your current property as an investment because your intent is not to occupy. Even if you are in the midst of the refinance it should not be an issue to change your occupancy statues. If the current lender your working with does give you grief about it cancel the transaction and find another lender. Once the refinance is complete purchase your new home as owner occupied. Hope that Helps.
I am not trying to upset you, but you know now that your intent is not to occupy the property you are refinancing right? The refinance is not done, so you should change it to a refinance of an investment property. No one said you cannot buy a new house and no one said you cannot refinance. This has nothing to do with you buying a new house, it has to do with the stated occupancy of your current one and you CLEARLY know what that is INTENDED to be.
I know everything about your nutshell because you shared it.
I know everything about your nutshell because you shared it.
- kjsimpson27
- Contributions:5
Chuck - I CLEARLY INTENDED to lower my current mortgage payment and then CLEARLY (weeks later) discussed with my husband buying a new home since we talked with a lender friend about the fact that we wouldn't need to put 20% down on a second home as we had originally thought these last several years. My "circumstances" are that of having 3 children in a tiny home and finally being able to purchase a new one while in the midst of a re-fi and finding out that we might not be able to do so and still buy another home any time soon. THAT is why I'm asking questions here and why I've asked questions of our lender doing the re-fi, which THEY answered to the contrary. They're the ones that told me we would be ok to buy now. If you can't tell, I'm trying NOT to commit fraud. So, please, do not accuse me of CLEARLY trying to be fraudulent. You know nothing about me or my nutshell. :)
The problem here is your intent. You clearly intend to rent it and that's fraud. If you refinanced with no intention of renting it and circumstances changed that required you to do so, that's not fraud.
You are clearly trying to commit fraud. You may not like the word, but that's what it is in a nutshell.
You are clearly trying to commit fraud. You may not like the word, but that's what it is in a nutshell.
- kjsimpson27
- Contributions:5
Roswell Moore - Thank you. This..."Borrower shall occupy, establish, and use the Property as Borrower's principal residence within 60 days after the execution of this Security Instrument." ...was in the paperwork sent to us to sign several weeks ago. Nothing about the 12 month owner occupancy, though. So, I'm guessing this WILL be in the Deed of Trust at closing. :-/
Ursula Strephans - Much more encouraging news! :) We, too, are looking to upgrade from our 1600 square foot home to one with at least 2400 square feet, and extra bedroom, formal living and dining, and 3-car garage. Unfortunately, we'll have to leave my children's current school to find a home that is affordable with these qualifications.
Does this mean then that we should wait to re-fi under HARP2 until after we've purchased another home. If we do that, is the only issue going to be a higher interest rate because it's an "investment property" and that we'll have to qualify legitimate reasons for buying elsewhere? That would be easy enough if that's the case. We're legitimately just wanting to do the right thing. The HARP2 re-fi will save us $230/month, so it was a no-brainer. Then, as we thought more about it we called a lender to see if we would qualify to buy another home and make this a rental.
So difficult for people who actually want and can make it all work if only allowed the opportunity.
Thank you so much for sharing your information with me!
Ursula Strephans - Much more encouraging news! :) We, too, are looking to upgrade from our 1600 square foot home to one with at least 2400 square feet, and extra bedroom, formal living and dining, and 3-car garage. Unfortunately, we'll have to leave my children's current school to find a home that is affordable with these qualifications.
Does this mean then that we should wait to re-fi under HARP2 until after we've purchased another home. If we do that, is the only issue going to be a higher interest rate because it's an "investment property" and that we'll have to qualify legitimate reasons for buying elsewhere? That would be easy enough if that's the case. We're legitimately just wanting to do the right thing. The HARP2 re-fi will save us $230/month, so it was a no-brainer. Then, as we thought more about it we called a lender to see if we would qualify to buy another home and make this a rental.
So difficult for people who actually want and can make it all work if only allowed the opportunity.
Thank you so much for sharing your information with me!
- Roswell Moore, C.M.P.S., "Mortgage.Coach"
- Contributions:104
From Fannie Mae's & Freddie MAc's Deed of Trust:
6. Occupancy. 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 circumstances exist which are beyond Borrower's control.
Single Family--Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3003 1/01
- Ursula Strephans, "UStrephans"
- Contributions:1
I recently worked with a family that wanted to purchase a larger home and rent the home they were in. The difference between their story and your story is that they will re-fi under harp 2, as being an owner-occupant is not a requirement. I worked with their mortgage broker to develop search criteria that would pass underwriting guidelines. We had to justify to the underwriter, their desire for the second, larger home. Such justification included, more square footage, a three car garage, larger lot, an extra bedroom, extra living space, closer to children's school. I am happy to report, they are happily living with plenty of elbow room in their new home and have happy renters in their other home. The paperwork is started on the re-fi of their original home. Glad to share the mortgage broker's contact info, just email me.
- kjsimpson27
- Contributions:5
Absolutely! In fact, we called them and asked if we wanted to buy another home at some point, would we have to wait a year and they said, "No, that's with an FHA and yours is a Conventional. However, when we talked with a lender about qualifying for a 2nd home purchase, he was adamant that in the Deed of Trust it would say that we had to wait 12 months. Another lender (personal friend of mine) said no, not true. So, as you can see, we're confused at every turn as the answer is never the same.
We were checking to see what we would qualify for in the purchase of another home, and id we would have to wait 12 months to buy, we would be willing to stop the re-fi process and lose $300+. We're definitely not looking to commit mortgage fraud.
We're just realizing that now is a good time to buy and we're unable to sell our current home, but it would be super easy to rent out. And, we can afford to pay both mortgages, if need be.
We were checking to see what we would qualify for in the purchase of another home, and id we would have to wait 12 months to buy, we would be willing to stop the re-fi process and lose $300+. We're definitely not looking to commit mortgage fraud.
We're just realizing that now is a good time to buy and we're unable to sell our current home, but it would be super easy to rent out. And, we can afford to pay both mortgages, if need be.
- wetdawgs
- Contributions:26840
You should be upfront with your lender about your plans.
Refinancing under HARP2 and want to buy a 2nd home as primary residence soon after closing on re-fi.
Will we be told we cannot buy another home for 12 months as was told to me by a friend?
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