It’s a scenario that comes up more often than you’d think: parents want to buy a condo or home near their child’s college — somewhere the student can live instead of paying dorm or apartment rent, and that the family might hold onto as an investment afterward.
It’s a smart idea in the right market. But the financing can be trickier than it looks, because how the property is classified — owner-occupied, second home, or investment property — has a significant impact on your rate, down payment, and loan options.
Here’s how it works under current guidelines. [Read more…]
The FHFA announced today that the pricing of mortgage interest rates for second homes or high balance mortgages will be more expensive. This impacts conventional mortgages (Fannie Mae and Freddie Mac) and is effective for loans that are delivered on or after April 1, 2022 – i.e. I expect to see the price increases to start happening soon. 
This situation comes up more often than you might expect: a homeowner refinances their current home using owner-occupied financing — getting a better rate than they would on an investment property — and then wants to buy a new primary residence. Is that allowed? And if so, how soon?
Every so often, someone will be interested in financing for a home they will not be living in 100% of the time…they want the best rate which is “owner occupied”. It’s crucial to know the difference in your lenders eyes and to be completely upfront so you avoid unintentionally committing fraud. Bottom line, the property and situation need to make sense to the underwriter.
