Legal Question in Real Estate Law in Maryland

Occupant Mortgage vs. Investor Mortgage

What happens if you purchase a residential property with an occupant mortgage but decide that you don't want to live there and either want to rent it out or sell it as an investor without ever personally occupying it? What are the implications? Can this be rectified at tax time by paying more for taxes? If not, how can it be fixed without refinancing?


Asked on 8/15/06, 1:05 pm

1 Answer from Attorneys
Robert Sher Wagshal and Sher

Re: Occupant Mortgage vs. Investor Mortgage

You will be in violation of the terms of your owner-occupant mortgage if you fail to occupy the property, unless due to unforeseen circumstances. You run the risk of the lender calling the mortgage if they find out. It's also a violation of federal law to make false statements on a mortgage application from a federally chartered institution.

Practically speaking, however, as long as the mortgage payment comes in on time, it's unlikely that the lender will make an issue of it.

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Answered on 8/15/06, 3:46 pm


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