All Forum Posts by: Kelly Conrad

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@Andrew Johnson Yeah, I'm not interested in committing fraud :) 

Ah. Well, this is what I was looking for! 

Occupancy fraud: This occurs where the borrower wishes to obtain a mortgage to acquire an investment property, but states on the loan application that the borrower will occupy the property as the primary residence or as a second home. If undetected, the borrower typically obtains a lower interest rate than was warranted. Because lenders typically charge a higher interest rate for non-owner-occupied properties, which historically have higher delinquency rates, the lender receives insufficient return on capital and is over-exposed to loss relative to what was expected in the transaction. In addition, lenders allow larger loans on owner-occupied homes compared to loans for investment properties. When occupancy fraud occurs, it is likely that taxes on gains are not paid, resulting in additional fraud. It is considered fraud because the borrower has materially misrepresented the risk to the lender to obtain more favorable loan terms.

But, I think that's only if you don't actually live there, and it sounds like since we're married anyways we couldn't do it.

Yeah....I mean I don't mean for it to come across like that...but it kind of does...

I guess another question would be if he's not on the house deed but is on the mortgage, would him purchasing a duplex on his own qualify that to be his primary residence? I guess I'm not sure what is used to decide that besides living there, and us being on our current house's title and mortgage?

Alright, bear with me here because this is a bit weird. 

We already own a SFR that we like and aren't looking to sell.

So we have ~30k that we can use, but apparently that's pretty tight when we need a 25% down payment and duplexes around our area in Minnesota around 230-330 range.

Here's my line of thinking, if my husband and I own our house together, could one of us move out and say we're looking to buy this duplex as the spouse's primary residence so we can get better lending and then "house hack" that way? Or could that not even be a possibility since we are both on the title for our current house? So say I'd be the primary resident for our current house, and my husband is the primary resident at the duplex? So we'd have the bare minimum at that location and he'd stay there and fix stuff up while staying there at the minimum time to claim he's a primary residence and then we'd BRRRR.

I'm sure this is incredibly silly, but my Google searching didn't bring up exactly what I was looking for. 

Thanks for reading! :)

@Ralph R. Oh! I misunderstood you then. Yes, he did say to lower that amount I'm contributing to only be what my employer matches. My bad!

Hey @Ralph R.,

I can get more concrete info, but my understanding was it's a loan against my 401k otherwise I'll be paying a lot of fees. I also know he has my best interest in mind since he's my dad and I get financial advise for free too :)

Hey @Ralph R.! So this would only apply to me, I'd definitely check with someone who knows your exact situation :)

Anyways, my advisor said that we can take a loan out of my 401k that I would pay back. He also said I'd want to get my company match, and then everything after that I can save for investing into my properties. He also said that money in my Roth can be used as well, but only the money I put in, I can't pull the interest that account has accumulated. 

We also have my husband's 401k that we moved after he left his previous job so we can utilize that extra money as well.

So with all of those funds we have available, we should be able to make some good down payments right away!

@Bruce Runn Sure thing, I appreciate the good ideas! As long as I'm not losing out on what I would have been saving in my 401k, then I'm all in :) I'll bring this up to my advisor tomorrow and see what plan we can come up with to start getting that money to be available so we can make some purchases!

I really appreciate your insight, that's incredibly helpful! Thank you!

@Bruce Runn Thanks for your input. My company does match 3%, so I should only put 3% in and then take the rest and put it aside for purchasing real estate?