When you convert your investment property to primary residence are you required to notify your lender and refi?
February 1st, 2010 | by admin |atl_ace1 asked:
What if you convert from primary residence to investment property? Do you have to notify your lender? Do you have to refi?
What if you convert from primary residence to investment property? Do you have to notify your lender? Do you have to refi?
Aren’t the interest rates different for primary residence and investment properties?
3 Responses to “When you convert your investment property to primary residence are you required to notify your lender and refi?”
By ConstantlyCurious on Feb 2, 2010 | Reply
You’re not required to refinance it but it would more than likely be in your best interest. Since the financing on an investment property carries much more risk than a primary residence the rates are either a lot higher or the costs of the loan are significantly more. If you financed it as an investment property when you bought it and now live in it as a primary you’ll be able to benefit from a refi. It will almost certainly lower your rate and better your situation. If you have any other questions check out this company i used to purchase my first investment property, they were great.
By Rudy on Feb 3, 2010 | Reply
Residence loans are normally a longer term, up to 30 years, and a lower rate.
So if you have a investment property that you have now decided to make you primary residence I would check with the bank and see if you could refi it. It will probably save you money. However you are not required to.
As for doing it the other way primary residence to investment property? I know several people that will buy a home fit it up while living in it for the required 2 or 3 years and then turn it in to a rental home and buy another home.
By chatsplas on Feb 5, 2010 | Reply
NOPE, don’t have to tell them, in either case
Generally owner occupied property has more favorable mortgage terms, lower down payment and lower interest rate
Also your insurance is cheaper when owner occupied
Thus it may be to your advantage to seek a Refi or Loan Modification from your lender when converting investment property into owner occupied. Loan modification is a LOT cheaper than a refi if you can get it.