Is it true that when if you get an Owner-Occupied Loan, you have to refinance when you move out?


Believe or not I have had a few clients think that this is the case. When you sign loan documents, the NOTE and the DEED of TRUST are the 2 contracts that you sign. There is also an occupancy statement form.

They all say the same thing whether it’s an FHA, Fannie, Freddie Mac, or VA loan: You will occupy the property within 60 days of closing and intend to live there for at least 1 year. If you move out after that, it’s fine and the loan continues. You will want to let the lender/servicer know that you have moved in writing so that they send the mail to the appropriate address.

They will not take a phone call, so be sure to notify the current servicer of where to send the payment. Moving out before the 1 year is up? Then make sure you have a good reason. Trying to get 2 owner-occupied loans in 1 year? Tough to do since the information is available to all lenders in a database on line system called MERS.  And lying on a mortgage application is a federal offense.