From Investment loan to Own-occ loan?

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From Investment loan to Own-occ loan?

Rachel Luoto
Lake Oswego, OR · Member since 2015 · 174 posts · 115 votes
We bought a triplex over a year ago with 25% down investment loan. Since then we have renovated it, 2/3 units rented (cash flows) and are moving into the third. But, what if we did a cash-out refi into a conventional owner-occupied loan? Our current loan is seasoned, both renovations and market have caused appreciation, and we will be living there getting a better interest rate and more money to buy our next property. Note: we used the cash-out before, so we are familiar with the process Has anyone done this and turned their investment property loan into an owner-occupied one? Thank you BP!!
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  • Jeremy TaggartBusiness Member
    Real Estate Agent · Pittsburgh, PA · Member since 2014 · 850 posts · 646 votes
    8y

    @Rachel Luoto I can't imagine why you couldn't do that if you are planning to move into one of the units. I think that'd be a great strategy since you'd get the lower interest rate and less closing costs. Either way I'm pretty sure it'll still be 75% LTV as far as the cash out amount goes.

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  • Chris MasonPro Member
    Moderator
    Lender · CA · Member since 2015 · 9k+ posts · 10k+ votes
    8y
    Originally posted by @Rachel Luoto:
    We bought a triplex over a year ago with 25% down investment loan. Since then we have renovated it, 2/3 units rented (cash flows) and are moving into the third.

    But, what if we did a cash-out refi into a conventional owner-occupied loan? Our current loan is seasoned, both renovations and market have caused appreciation, and we will be living there getting a better interest rate and more money to buy our next property. Note: we used the cash-out before, so we are familiar with the process

    Has anyone done this and turned their investment property loan into an owner-occupied one?

    Thank you BP!!

     Yup you can do that if you are in fact living there. Since you're living there, make sure bills and the like are going there -- it can look suspect to underwriting if you say you live at 123 Main St but all your paystubs/bills/bankstatements/etc are going to 456 Alternative St, I'm sure you can see why. 

    You will certainly get a better interest rate as owner occupants, but that doesn't guarantee a better rate than you presently have. Yesterday's investment property rate isn't far off today's owner occupant rate. For better or worse, rates are presently "Trump"ed up.

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