Mortgage and owner occupy Questions

5 Replies

Good day everyone!

I'm not an investor ...yet and new at this. I would love to listen to you guys opinions ( right or wrong and what should i do ? ) and thank you in advance. :-)

I'm planning to buy a property in DFW area with less than 20% down. Mainly for my brother to live there and commute to school. Hopefully can rent out a room with someone else (would be a big help with my monthly payment) . 

Is that okay to do that if im not physically live there ? Im not sure about all the rules so i thought Biggerpocket is the best place to ask . 

and do mortgage company really come to your property to check if you live there or not ? ( sorry for the silly question)

Thank you 

@Joseph Seago if the property will not be owner occupied you can purchase as an investment property with 15% down minimum on a conventional loan. You can count potential rental income to help qualify as well.

If you are going to occupy, you can get a primary residence with as little as 3% down (conventional) or 3.5% (FHA)

I've never heard of a mortgage company checking a property to see if you live there or not. However, you would be committing mortgage fraud if you represent that you will occupy and then you do not.

Hi @Joseph Seago welcome to BP and the real estate world! Lenders want to know if you'll live in the property or not. If your not its seen as higher risk in which it would be considered an investment or possibly a 2nd home. Interest is going to be a bit higher. You'll sign documents at title saying you understand its a federal offense if you lie about the occupancy status. They do check occupancy cross reference with utility records, drivers license info, insurance to name a few. I've seen some 5% down conventional loans out there for investors. Hope this helps!

No, that would not be consider an investment property. If you are occupying it would be considered a primary residence. For qualifying purposes you would not be allowed to count rental income from rooms being rented out though. 

Originally posted by @Joseph Seago :

Thank you @Tyler Hodgson . 

is it consider an investment property if i only rent one room out and occupy the other room ? or that would be a primary residence ?