Any issue with getting mortgage for second home and then renting it out?

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Any issue with getting mortgage for second home and then renting it out?

Jolene Perry
Grimes, IA · Member since 2014 · 13 posts · 0 votes

I am considering a purchase of a second home that I will probably want to rent out for a couple of year's until I am ready to move to the new location. Since interest rates are higher if I go in calling it an investment property rather than a second home, is there an issue if I do call it a second home and then decide to rent for the two years?

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Cal C.
Investor · Peachtree Corners, GA · Member since 2014 · 1k+ posts · 1k+ votes
12y

Only issue is mortgage fraud.

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  • Cal C.
    Investor · Peachtree Corners, GA · Member since 2014 · 1k+ posts · 1k+ votes
    12y

    Only issue is mortgage fraud.

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  • Joe Butcher
    Dallas, TX · Member since 2013 · 311 posts · 94 votes
    12y
    Originally posted by @Cal C.:
    Only issue is mortgage fraud.

    Not to mention what are you going to tell the insurance company.....that it is owner occupied or a rental?

    Not being entirely honest in one area usually has a snowball effect that necessitates more of the same.

    The interest rate isn't that much different. My rent house is at about 5.25% and that's still a good rate compared to the nightmare rates of yore.

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  • William Brace
    SFR Investor · Watkinsville, GA · Member since 2011 · 83 posts · 33 votes
    12y
    Jolene Perry as Cal C. Pointed out, mortgage fraud is the obvious problem. Then you have the insurance issue. If your plans are to have renters then it's an investment property plain and simple. Now you also have all the tax advantages of it being a rental :)
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