Buying a Home Shortly After Refinancing

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Does the occupancy of your new home loan impact your loan options for the next 6 months?   Yes, yes and absolutely yes it can.   Occupancy intent is atop the radar of all lenders and for a very good reason.

Occupancy refers to the manner in which a borrower will occupy the home.  For example, the 3 options are:

  1. owner occupied
  2. non owner occupied
  3. vacation home

Home lending has forever been concerned with occupancy.  However, more recently mortgage investors increased their interest in occupancy.  As a result, their evaluation methods for validating a borrowers stated occupancy intent are more in depth.   Specifically, investors now require mortgage underwriters analyze a Phoenix home loan applicant’s most recent 12 months home loan activity.

6-12 Months Makes All the Difference

Underwriters look for a few critical details during their occupancy review:

  • Has the Arizona loan applicant completed a mortgage transaction in the past 12 months?
  • Was the transaction a primary residence?

A “yes” to both does not mean all best are off.  However, it does mean you have more work ahead.   Underwriters must confirm no occupancy fraud occurs.   In part, they do this by asking about the previous transaction as well as the motive for the new transaction.

Borrowers in this situation must explain why their intent to occupy has changed drastically in recent months.  Typically, borrowers that refinanced or purchased their primary within the previous 6 months have a tougher time getting approved for the 2nd primary purchase.  However, depending on the circumstances it is entirely possible to do so.

What is the Solution?

Have a conversation with your Arizona Mortgage Lender regarding your future plans when refinancing.  If seriously considering a new home purchase in the near future, make sure the refinance is set up in a way that works later for your purchase.

If you are in a spot where an extraordinary circumstance caused you to buy a new primary, work with your Phoenix Mortgage Lender to document what happened.

By Jeremy House
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