Renting primary residence
Hi
I recently purchased second home with the intention of moving in. I got the loan for primary residence with 5% down. But only lived there for a month and had to move back to my older house and rented the new one. I knew i shouldnt be doing it but largely ignorant of legal repercussions of my decision at that time. My loan was sold to different lender. My original lender (mortgage company that i originally got the loan from) approached me for refinance and i said yes. During the course i mentioned its not my primary residence that's when i was told what i am doing is mortgage fraud and could be jailed. So my refinance process was stopped.
Meanwhile my home insurance company cancelled my insurance siting reason that i moved the home to LLC. They sent the cancellation notice to my original lender so i am guessing my current lender doesnt know about it yet. I am getting new insurance in my name and not in LLC name.
But i am really worried what would happen if my current lender finds out i am not living there. Since i have tenant there with six more months of lease left i will have to break the lease and get there. Iam not sure about the financial implications but i know for sure i will be putting a very good tenant in very difficult situation. Other option is to refinance it as investment property. But i dont have sufficient funds for that.
If my concern is really valid and there is real danger of legal action i will have to break the lease and move in there. But like to get advice from experts before making such decision. Appreciate help.
Thanks