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Here is our situation: We are looking at buying a duplex. As I understand there are two loans, one for a house you live in and one for a rental property that your purchase. In order to get a loan that we can afford we have to plan on moving in one of the units. The lower unit has a one year lease and when it is up we will be moving in. The upper has a six month lease and we will rent it out again when they move out.
Is it legal to get the loan now, purchase the duplex and move in a year?
Ask your loan person if you will need to sign an affidavit of occupancy, if so ,read it , it should answer your question. What has your loan person told you about doing it, surely they know the situation.
It is legal to get the loan now and move in later but you must purchase the property as a investment loan and not a primary residence loan. The investment loan would require larger downpayment and the rate will be higher.
Ask your loan person if you will need to sign an affidavit of occupancy, if so ,read it , it should answer your question. What has your loan person told you about doing it, surely they know the situation.
She said we have to move in within 60 days, however she also said nobody will notice if we do not. I am wondering about the potential consequences and legality if we do that.
She said we have to move in within 60 days, however she also said nobody will notice if we do not. I am wondering about the potential consequences and legality if we do that.
Is she able to do it, can I get her name and phone number? What state did you find this deal of a duplex?
Is she able to do it, can I get her name and phone number? What state did you find this deal of a duplex?
It's a company in Wisconsin that she works for. I assume she wouldn't be lying.
The other option is evict both tennants upon buying the duplex and just live in the lower and let our friend rent the upper. Would that be possible? And safer?
Here is our situation: We are looking at buying a duplex. As I understand there are two loans, one for a house you live in and one for a rental property that your purchase. In order to get a loan that we can afford we have to plan on moving in one of the units. The lower unit has a one year lease and when it is up we will be moving in. The upper has a six month lease and we will rent it out again when they move out.
Is it legal to get the loan now, purchase the duplex and move in a year?
It's one loan. It is mortgage fraud if you aren't moving in within 60 days and that is not something you want to mess with.
Yeah, I personally would not commit mortgage fraud, even if my lender told me "no one would notice".
If the current tenant is in a lease, which you indicated they are, you most likely can't evict them unless they violate their lease or don't pay rent.
The other option, and the right, legal one, is to get a non-owner occupied loan, which will be at a higher interest rate, and possibly a higher down payment. If you can't afford that, you shouldn't buy.
She said we have to move in within 60 days, however she also said nobody will notice if we do not. I am wondering about the potential consequences and legality if we do that.
Nothing like dealing with reputable people. You and her (I assume she is a loan officer) will be committing fraud, not that anyone will notice. I guess laws are only for people who obey them.
If of course this does not work out for you and you wind up in foreclosure you will probably blame the bank that gave you the loan.
It's a company in Wisconsin that she works for. I assume she wouldn't be lying.
The other option is evict both tennants upon buying the duplex and just live in the lower and let our friend rent the upper. Would that be possible? And safer?
I'm not sure why you think you need to evict both tenants. I am unfamiliar with local rules, is there any type of rent control? You can simply ask the tenants if they want to leave. There are certain aspect that a good real estate on both side might be able to help you with how to proceed. Do the tenants know the property is for sale, sign out front , inspections, etc. Is the seller in a rush to sell, is it a buyers or sellers market? You have some options a local pro might be able to help.
If you do go the route of renting to a friend, what will you do when they say they can pay the rent , are you going to let them live there for free?
Would you share with me the company she works for that does loan for duplexes in Wisconsin?
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