Contractor · South Vienna, OH · Member since 2019 · 41 posts · 22 votes
I just closed today on my first property. We done a conventional 30 year loan and at closing there was a paper I had to sign that said I must have the home as my primary residence for 1 year. My wife and I are thinking of living in our RV full time and just renting the house out. Is there a way around this? What if I ‘technically’ keep this as my primary residence and just rent out the rest of the house? Or does the lender not really even care? The insurance is escrowed so they will be notified if I switch to landlord insurance. Or do I just tell them I don’t want to occupy it anymore and want to make it a rental is this possible or would that have to completely rewrite the loan?
Woodbridge, VA · Member since 2017 · 122 posts · 44 votes
4y
@Kevin Romines I don’t know the OP’s circumstances. One can think of uncountable unforeseeable circumstances which may give rise to genuine change of circumstances. Losing a job, pay cut, getting unwell, divorce, job transfer and the rest.
I don’t like to accuse anyone of fraud in a public forum. If the OP has a genuine explainable change of circumstances, he can disclose it to the lender and the lender can either recall the loan, consent or offer some other alternative. My point was that saying nothing is an option but the OP must be ready to bear the consequences or at least explain this change of intent so soon after the closing.
Woodbridge, VA · Member since 2017 · 122 posts · 44 votes
4y
@Torrell Palmason I think that's a bit over the top unless the OP had no intent of ever occupying the property. The point is that people's circumstances can change. My friend broke his leg shortly after closing on a primary residence so had to go live with his parents for better part of the year while he recover since his property had a flight of stairs and that he needed help due to the nature of injury. His credit union consented to him renting the place.
Perhaps you can explain it to your lender. You could say nothing but it comes down to your judgment call whether you would be able to explain this "change of intent" shortly after the closing through some extenuating circumstances. Imagine, if someone was trying to convince you why they did what they did, would you buy it?
Lender · Winlock, WA · Member since 2013 · 1k+ posts · 1k+ votes
4y
@Jacob Beg your comments can be true but are also venturing into a bad territory.
There is a huge difference from what you described (letting his credit union know and getting their permission) to what Nick described as Mortgage fraud. If I were the loan officer that completed that loan and I heard the borrower say this after closing, I would be required and would do so voluntarily any way, turn him in to my management. My management would notify the FBI, and investigation would be done and if found guilty, he could face up to a million dollar fine and 30 years in prison. It is not to be taken lightly.
Woodbridge, VA · Member since 2017 · 122 posts · 44 votes
4y
@Kevin Romines I don’t know the OP’s circumstances. One can think of uncountable unforeseeable circumstances which may give rise to genuine change of circumstances. Losing a job, pay cut, getting unwell, divorce, job transfer and the rest.
I don’t like to accuse anyone of fraud in a public forum. If the OP has a genuine explainable change of circumstances, he can disclose it to the lender and the lender can either recall the loan, consent or offer some other alternative. My point was that saying nothing is an option but the OP must be ready to bear the consequences or at least explain this change of intent so soon after the closing.