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Updated almost 5 years ago on .
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Lying About Primary Residence for a Refinance
BP,
I have a situation I want to run by you to A) see if I'm doing anything wrong and B) understand if I should've taken action earlier...
January 2017 - I purchased a home in Pittsburgh with a 5% conventional loan as my primary residence
November 2017 - I relocated to Philadelphia to start a new career and had three friends (4BR house) sign a lease that would take me until the next full rental cycle.
I recently inquired about refinancing the loan and I was asked "Is this your primary residence"? Obviously, it is not. However, because I only have 3 individuals on the lease I'm wondering if it makes an incredible difference to pass a little white lie in this situation, as I would also like to use this income to qualify for a better refi.
I'm just confused as to why the lender would care about this during a refi? It is clear that I didn't do anything wrong last year when purchasing, however, on the refi it would be a little bit of a lie to maintain the stance that I still live in the home.
Lastly, I'm curious if I had an obligation to the lender to inform them of my move in November?
Any help would be greatly appreciated!
Cam
Most Popular Reply

Generally there is no issue with buying a house with an OO loan then moving and renting the house with that loan in place. Especially when you have a job related move to a different city.
However, now when you want to refi, telling the lender its owner occupied when its not is not a "little white lie". Its fraud. Interest rates are lower for an OO refi and the allowable LTV is higher. For example, Fannie Mae eligibility matrix says a cash out refi on a primary SFR is 80%. For an investment property its 75%. Will you get caught? Maybe, maybe not. If you do, the consequences will be more severe than the benefit you gained from the lie.