What counts as a primary residence?

 

What counts as a primary residence?

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When purchasing certain types of government property (e.g. HUD, Fannie Mae), the contract might ask if you’re purchasing as a primary residence or not. If you’re purchasing this property for the purpose of renting, flipping, or even buying it so someone else (e.g. parent) can live there, it’s not considered your primary residence. If you will be living in this property, it is an owner-occupant / primary residence purchase.

If you already own another dwelling, you’ll want to make sure your lender and homeowner’s insurance are informed, as that may be have implications for your mortgage (less likely) and will likely change your insurance rate.

You might also need to talk with the county assessor to remove your Homestead Exemption.

When determining your financing and insurance for your new purchase, make sure to volunteer whether it’s an owner-occupant or investment purchase at the time of application, whether you’re asked or not. You don’t want your lender or insurance agent to quote you an owner-occupant rate (usually better) and find out later in the buying process that you’ll have a more expensive payment because they assumed you were purchasing as your primary residence.

If you don’t volunteer the information, you’ll eventually sign your name at the closing table that you do intend to occupy the property as your primary residence. Falsely signing your name to such a statement is considered fraud.

Consult your REALTOR®, lender, and insurance agent so we can provide you with the information applicable to your specific situation. We’re all here to help and to serve you.


Real Estate Answers: Finances

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