Investor · Chatham County, NC · Member since 2014 · 89 posts · 20 votes
We're almost done closing on the refinance of our home from a 2-Year ARM to a 30-year fixed at 3.875%. We have lived in the home for 9 years and have about $90,000 in equity on a value of $340,000 or so.
As we have been doing this, we realize we like our home but it is far from perfect. I have just rented out our first income property to solid tenants, and feel like I could rent ours as well.
Is there any statute of limitations on how long we need to live in the house under the refinanced loan before we could rent it out? Or does our 9-year tenure living in the home (under the 2-Year ARM) allow us to rent whenever we please?
Lender · Tampa, FL · Member since 2014 · 543 posts · 168 votes
8y
What you're worried about is what's called "Occupancy Fraud" and the lender calling the note due.
However, a few months after closing, if your life changes and you need a bigger home or one in a different location, then you gotta do what you gotta do.
I would wait for at least 4 mo./ payments, giving the refi loan lender time to sell the loan to the investor or servicer and after they run an Occupancy Check. (some investors do this before they purchase the loan)
But being that you've owned the property for so long it's a lot different than a borrower buying a property as a primary residence to get the best loan terms, then turning around and renting it (i.e. loan fraud / occupancy fraud)
Usually, as long as borrowers make payments on time, I've not heard of any lender suddenly calling a note due.
Investor · Chattanooga, TN · Member since 2016 · 676 posts · 543 votes
8y
@Patrick M. I think @Account Closed is correct and is being very cautious. If you can wait a few months its probably best but since the home is your primary and has been for a good amount of time there is probably nothing that anyone can do post close to prevent you from moving. And on top of that it is unlikely that anyone would notice or care. If you pay your mortgage bank usually are fine with just about anything. It is different if you buy a house claiming you are going to live there for favorable mortgage terms and then either never move in or stay a very short time.
In this case you are probably fine but Id wait a few months unless you really have a good reason to jump right away. Another thing to consider is how soon you can get a new mortgage on a new place for yourself. It might be hard if you plan is to go buy another house next week to even get decent financing. Might need to wait for that reason alone.