Refinance

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Submitted by sd_resident on May 14, 2012 - 10:59am

I'm in the process of refinancing my principal residence. I'm also actively looking for another house which will become my principal residence and my current home will be rental. It's unknown at this point when I'll buy the second house and move. Should this be known to the lender who is handling refi? After refi is done, what's the minimum period one MUST occupy current principal residence before making it a rental? If I happen to make it a rental before this minimum period expires, what's my legal obligation? Thanks for your advice.

Submitted by sdduuuude on May 15, 2012 - 9:00am.

Depends on how long you will be in the house.

I just went through this. Refi'ed my current home as an owner-occupied property but may move soon.

The verbiage basically said if I moved out before 60 days, then it would constitute default and the entire balance of the loan would be due immediately.

Also said that by moving within the first 12 months, it makes the loan worth less on the open market and I would have to indemnify them against any such losses if I moved in the first 12 months.

That's my contract. Yours may be different.

And, would anything happen if you move in 6 months ? I don't know.

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