What does "Owner-occupied" mean?

Definition

An owner-occupied property is a home where the owner lives full time. In real estate, this typically means a borrower lives in the home they are financing.

Understanding Owner-Occupied Homes

Owner-occupied status often comes up when applying for a mortgage. Lenders want to know if the home will be your primary residence. This can affect loan terms. In simple terms, it means you'll live in the home you buy. Example: If you buy a home for $200,000 and plan to live there, it's owner-occupied. It's not about rental properties or vacation homes. Some think owner-occupied homes always get better rates. That's not always true. Rates depend on many factors. It's not just about living there. Owner-occupied homes also show your intent to make it your main home, not just an investment.

People Want To Know

What are the downsides of an assumable mortgage?

Assumable mortgages can have downsides such as the original borrower remaining liable for the loan if the new buyer defaults. Additionally, the terms of the existing mortgage may not be favorable compared to current market rates. There may also be restrictions on the type of buyer who can assume the mortgage, such as income qualifications or credit score requirements.

How do you prove owner-occupied?

To prove owner-occupied status, borrowers must provide documentation such as a driver's license showing the home address, utility bills in their name at the property, and a signed occupancy affidavit. Lenders may also require a declaration confirming that the borrower occupies the home as their primary residence.

Do banks check owner-occupancy?

Yes, banks check owner-occupancy. They often require documentation, such as a signed occupancy affidavit, to verify that the borrower will live in the property full time. Additionally, lenders may conduct a property inspection or appraisal to confirm it is not being used as a rental or investment property.

Flip the Script - Master mortgage objections

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