Asked in Home BuyingProperty Law
What happens if you state that a home you buying is your primary residence and then you rent it out?
September 16, 2007 6:13AM
Since there are different rules for loans for a rental versus a primary home, the mortgage company can call the loan, especially if you misrepresent the reason for getting the loan. Usually, there is a rule that it needs to be a primary home for a period of time, for the purpose of tax on capital gains when you sell it. Also, if you are living in a home you own already, they will want you to have a signed lease agreement for that. If you buy a home to rent out, then you'll probably need a signed lease for it, too.
Furthermore, you may no longer qualify for owner/occupant benefits on your taxes and insurance, among other things, if you are no longer living there.