What’s The Best Way To Get Around Owner Occupancy?
Owner occupancy is a remarkable investment strategy to fund a property. However, conventional occupancy-related loan terms require borrowers of primary home loans to sign an affidavit first. This document indicates that the borrowers will individually occupy the acquired home for a specified period.
These terms might not be favorable to borrowers who have a change of mind and decide to have their primary residence rented out before the given time elapses. Many borrowers might be curious to discover whether it’s possible to get around owner occupancy as provided in the lender’s mortgage contract.
Bypassing the terms of a primary home loan is possible without committing occupancy mortgage fraud or going against the lending terms. This article discusses ways you can legally get around this rule.
Possible Ways Around the Owner-Occupancy Clause
Getting out of the owner-occupancy mortgage contract is legally possible without breaching the terms of the occupancy clause. However, this depends on the loan borrower’s intention at the closing moment.
In most cases, the loan affidavit or loan terms require borrowers to occupy a given property for not less than one year. Even so, the terms may change under certain unique circumstances:
- Occupancy terms can be bypassed if the home occupier or loan borrower needs to move.
- It can also happen if the homeowner gets a job transfer that necessitates a move.
- The mortgage contract can be bypassed if the occupier desires to move in or live with a new partner or significant other.
- Similarly, it’s possible to go around the occupancy clause when there’s a sudden need to change school zoning.
- Death and severe illness are other reasons that will make it necessary to bypass the occupancy clause.
If any of these unique scenarios happen, the occupancy clause can be bypassed with the permission of the lender. The lender may require further documents that prove the validity of the claim before giving permission. It’s also unethical for lenders to force homeowners to occupy homes if they genuinely need to move.
Nevertheless, to be free of the prevailing owner-occupancy clause that applies to the home loan on a primary residence, the property owner has to prove they intend to live in the home when they acquire it.
What Proof Can a Borrower Show a Lender to Bypass This Clause?
The lender may require a borrower to present valid documents as proof of their intention to live in the home for a specified period. These documents may include the following:
- Relocation or transfer letters from an employer
- Marriage certificate
- Divorce papers
- School enrollment forms
- Birth certificates
- Death certificates.
The borrower must also provide a statement or letter signed by both parties attesting to the valid reasons for wanting to bypass the owner-occupancy clause. This statement should be accompanied by documents proving the claim’s validity.
To ensure legal compliance, the borrower should also provide a written statement to the lender indicating the reason for bypassing the owner-occupancy clause. This statement should also include the borrower’s willingness to abide by the loan terms and conditions.
The borrower should also provide a written agreement to the lender with information on the property’s occupancy plans and a copy of the lease. As a final step, the borrower has to submit a written request to the lender for permission to bypass the occupancy clause.
Getting Around Owner Occupancy Legally
You can finance your home ownership goals without tying yourself to a mortgage clause. But before that, you need to understand how serious lenders perceive owner occupancy and how keen they are to make a return on the loan.
Suppose you need to get around the owner-occupancy mortgage stipulations. You must do it appropriately by justifying your intentions with solid proof to avoid bank fraud. Contact our specialists today if you need advice on your next investment.