Posted by Ed Copp (OH) on March 19, 2001 at 07:21:47:
Sure would be a mistake to begin your investing enterprise with mortgage lender fraud.
At any time that you attempt to get a lender to believe that the situation is other than it is, you are committing fraud. In this case attempting to have the lender believe that you intend ot “owner occupy” when you actually intend to rent, that’s fraud.
If there are any federal funds involved in the mortgage loan then the case would be “federal” mortgage lender fraud.
Not a game that I would reccomend, there are better ways to begin.
Would it be a mistake to finance a rental property as a primary residence. This being my first deal I wouldn’t want to get off on the wrong foot, but being able to finance 90% instead of 70% sure is tempting. thanks
Why would you do that anyway? Go to your local REIA meeting. When I was at mine two weeks ago, there were plenty of 10% down, non-occ, no doc investor loans. There were also 5%, lite-doc investor loans, and even 80/20, 0 down, no doc, investor loans. The mortgage brokers who attend these meetings know the investor mentality and speak the language. I don’t know if we’re headed for a recession or not, but I DO know, I’ve never seen money & credit flow so freely, ever. Plus, the Fed is expected to lower another 1/2 to 3/4 of a point this week, which will only add fuel to the fire.
Please don’t make the mistake of thinking that you need to buy rental property right away. Nothing creative about getting a mortgage at 10-30% down. Susan suggested being more creative. I suggest it plain dumb to buy rental property to begin with. You apperently don’t have the capital to invest or lower down wouldn’t interest you so much. Read all the things here and learn how not to use your credit or money to make money. There is no question that if you have it it can make it easier and build wealth faster. Until you learn OPM or leverage you will still struggle. Flips, L/O, subject to will allow you to control property and make money. When you have your bills paid and surplus cash then start looking at rental property.