Different Occupancy Types
There are three different occupancy types when it comes to mortgages: primary residences, second homes, and investment properties. Primary residences have the lowest down payment requirements and the lowest interest rates, and therefore, that is the preferred occupancy type for most borrowers.
In most cases, you cannot get a mortgage with an occupancy type of primary residence if you don’t live in the house. However, there are exceptions to this rule.
Multiple borrowers: Only one borrower needs to occupy and take title to the property.
Parents or legal guardian wanting to provide housing for their handicapped or disabled adult child: If the child is unable to work or does not have sufficient income to qualify for a mortgage on his or her own, the parent or legal guardian is considered the owner/occupant.
Children wanting to provide housing for parents: If the parent is unable to work or does not have sufficient income to qualify for a mortgage on his or her own, the child is considered the owner/occupant.
If any of these exceptions apply to you or to someone you know, or if you have any other questions regarding different occupancy types, contact us. Not every lender knows about these exceptions, and there is no reason for you to make a larger down payment or pay a higher interest rate than you need to.