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Question about 2nd home purchase..

maxie.maverick 950 92 July 27, 2016 at 12:28 PM in Home & Home Improvement
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Last Edited by maxie.maverick July 28, 2016 at 02:24 PM
Scenario:

1. We bought a new condo 3 months back. Husband is the only name on 1st mortgage application although "Husband+Wife" names are on the deed.

2. Another condo in the same community comes up for sale. Wife interested in the purchasing this with only her name on the 2nd mortgage application although "Husband+wife" names are on the deed.

Questions:
1. Can husband call the 1st home his primary residence and wife call the 2nd home her primary residence?
2. Seller of 2nd condo wants to continue in the home after closing date for a total of 6 months before moving (month to month tenant for this duration). How will this affect mortgage? Can we still call it wife's primary residence because legally her mail can be delivered here?
3. How will this affect our taxes?
4. Is this even possible?
5. Is this even a good idea?
6. After tenant moves out, we plan to move to the 2nd condo and rent out the 1st... Will husband be forced to refinance because it becomes an investment? If husband is happy with 1st mortgage rate, can he continue just paying that without refinance?
7. Do we have to disclose to the lender that wife's name is on the deed of 1st home even if she has nothing to do with 1st mortgage?
8. Will lender/underwriter change their decision if they know wife is co-owner of 1st home but has zero debt and so is qualified to purchase new home?

Help appreciated. Thank you
Max

5 Comments

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Original Poster
#2
Any one?
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If you don't like the way I drive..... Please get the heck off the sidewalk!!!!
#3
when you apply for a mortgage you have to specify whether it will be a primary residence. you have to move in within a certain amount of time, and if they find you renting it out they can call the loan due. you may be able to discuss it with your lender if there is already an expectation of previous owner renting for a time.

after some amount of time you can move and rent it out without them calling the loan, but i don't know the specifics, or who determines that. you may still be short of that deadline on #1 right now, but it is possible that after the 6 months of renting #2 to the prior owner you will have passed it and can both make #2 your primary without worry on #1.
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#4
It is a good thought, however, you will not get this past an Underwriter.
The application will reflect your wife's current address and public records has her owning that address.
If she was relocating to that other apartment there would need to be a believable letter of explanation, which is highly doubtful (outside of showing divorce papers showing you are splitting up).

Keep in mind that just because you may not disclose something on the application that lender's utilize a number of search services and will more likely than less easily find out the critical facts when it comes to important details needed in order to accurately underwrite a mortgage scenario.

Finally, mortgage guidelines do not take into account any proposed future intent and will be basing the evaluation on current situations and the current documentation provided.
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-Adam
Old Hippy & Mortgage Pro
#5
Second homes cannot be located within 100 miles of your primary residence. Owner-occupied units must be occupied within 60 days of closing. The scenario you described would be fraud.

With regard to # 6. No refinance required.
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Last edited by RichardK4322 July 29, 2016 at 08:11 PM
#6
Quote from RichardK4322 View Post :
Second homes cannot be located within 100 miles of your primary residence. Owner-occupied units must be occupied within 60 days of closing. The scenario you described would be fraud.

With regard to # 6. No refinance required.
Agreed with most of what is said here, however, a second home can be located under 100 miles if deemed in a vacation community. An Underwriter would have no issues with a shore house being a second home an hour away. It needs to make sense (and Underwriters, for the most part, are very much in tune to what makes sense and what does not pass the smell test).
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