Can you buy a house and then rent it out?
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Anonymous
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I'm currently renting a pretty nice and relatively newer house but have the cash to buy a smaller and older house (also need to borrow some to do it). I want to continue to live in the current rental while renting our the newly purchased house for cash flow.
The question is, if I borrowed the loan at the primary residential rate, would the lender figure out later when I rent the house out? |
Anonymous
| My neighbor tried that and we called the mortgage company on her. She sold. |
Anonymous
| What a nice neighbor you are! How did you know which mortgage company to call? |
Anonymous
+1 |
Anonymous
That just seems like such a crappy thing to do. |
Anonymous
No, you can not. It is mortgage fraud. You need to buy it as investment property, put a bigger down payment (25% - 30%) and pay slightly higher rate. |
Anonymous
| What you do is buy your smaller, older house, live there for three months, and then you move out and rent it out. Sublet your current place if you can, or suck it up. Lots of people do. The terms of non-primary residence mortgages are crappy when compared to primary. |
Anonymous
| very hard to prove fraud, your intent to live there can change , hard to prove intent |
Anonymous
Typical in DC - people love getting involved in shit that's none of their business. OP, you have to state on the contract that you plan to live there as your primary residence. So you have that lie to contend with as well. I wouldn't do this, but people do it all the time I'm sure. |
Anonymous
| Its fraud. A loan is a federal document. They screwed themselves by lying. |
Anonymous
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Real estate attorney here. The loan docs are actually not vague as to what is owner occupied. Intent is irrelevant. Instead it says that you will move with 60 days and reside there as your primary residence for 12 months.
You would have to buy as an investment property. |
Anonymous
Um, the crappy thing to do was to use fraudulent means to impose a rental property on a community. I'm applaud the pp's due diligence and reaction, and I am appalled that you scolded her for doing it. So, before you go off on OP's "typical DC response" I would content that in fact, it was the investor who acted badly. Shame on you for blaming the victim here. |
Anonymous
Renting it out immediately is pretty good proof. |
Anonymous
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Oooh 22:40 you sound like a dirty nimby. 'imposing a rental on a community'?
We imposed a lovely family on a community at our rental. It's not your business how a mortgage is obtained as long as an area is zoned as residential. Go bother people who are actually wrecking others lives with real crimes. |
Anonymous
+1. From the "typical DC MYOB" poster. I just have bigger fish to fry in my life than sitting at my freaking window watching neighbors and reporting them for stupid crap. Get. Lives. |