Primary residence or investment property

5 Replies

So my partner and I are buying our first house which we aim to live in for a small portion before we leave to complete our masters in Spain for 1 year. We would be living in the property for either a bit over a year or only a few months depending on when we decide to begin our program.

My question is, when we are getting a mortgage, should we classify this as a primary residence, or should we classify it as an investment property. I think having it as a primary residence would allow us to only put 3% down where as I don't think this would be available if it was primarily an investment property. What would happen got the loan as a primary residence and then moved out after 4 months?

Any help would be lovely as we are complete beginners. :)

Liam, if you are purchasing the property with the intent of it being a primary residence, then that is how you should mortgage it. Life happens, and people have to move all the time. It sounds like you intend for this to be your primary residence. 

Originally posted by @Liam Martin Ruane :

Cheers for the response, Scott. Much appreciated. Any insight as to what would happen on mortgage side if we left within 4 months of purchase. Just want to make sure I'm not breaking any rules.  

I want to reiterate: your intention is what matters. As long as you intend for this to be your primary residence, you are all good. My advice would be to adapt the mindset that you are going to live in that residence at least 1 year. If, however, an opportunity presents itself where you move overseas, so be it. 

What I am not advocating is you purchase this property, knowing you are moving in 4 months, move across town to purchase another primary residence, only to move a few months later to another primary residence. These are different scenarios than the one you presented. 

@Liam Martin Ruane nothing will happen from a mortgage perspective if you go the primary residence route as long as that is your intention as Scott mentioned. They won't come back to you and ask for additional funds etc. However, if you tried to get another primary residence loan at the 3-5% down 4-5 months later that would be denied, most likely.