Mortgage Queries

[Kim Chen]

I'm planning on getting a home and I will rent it out. Now I know that most banks tack on interest points and require additional fees if you say that the property is going to be an investment or non-owner occupied property.

With that, can I just not tell them about my real intention so I can avoid additional fees?

Will they deny me the loan if they found out about this?

Regards!

[Tom Dunn]

Hi Kim,

Unfortunately, it is NEVER a good idea to misrepresent or withhold information on a mortgage document, for a couple of very important reasons. First, and at the risk of sounding preachy, it is just wrong. It's lying.

Second, on a practical level, it's fraud, which is illegal, and could cost you money, jail time , or both.

Do the right thing and disclose accurate information. That way, you'll never need to look behind you to see who is coming, and you'll always be able to live comfortably with yourself.

I wrote a more detailed article on this very subject, Real Estate Investing Ethics- When is Lying Just Being Creative?

All the best,

Tom Dunn

I just put a new article up on this site called Real Estate Investing - Where Should I Invest? Check it out!

[davidanderson]

Good Day,

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I am a lender that gives out short and long term loans with a reasonable interest to business firms and also individuals that can pay back the loan the right time and at the stipulated period.

My loan ranges from $5,000usd to $500,000usd with an interest of 5%.

For more inquires on getting a loan from me, feel free to reach me via e-mail, [e-mail]

Regards,
Mr. Anderson

[Hollywood Landlord]

The chances of them finding out are slim, however it just isn't worth it - as Tom said, it is considered loan fraud and punishable by fines and prison. Go for the little bit of extra moola and know that you're going to make it back over the long term.



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[Stephen Bradt]

It's probably not a good idea to try it. Lenders are much more diligent about fraud then they were. But, here is what they will look for...

Whether you already own a home and it's distance to the new property.

Your homeowners insurance policy. You insurance policy states if it is owner occupied, rented, etc. The lenders do read the policy before closing. If you take out insurance as an owner occupied property, and then rent it out, your policy is invalid. The insurance company will not pay if anything happens, they will cancel your policy, and notify the lender.

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