My wife and I currently live in a double we own.
We are looking to buy a single family home in the next 3 years. If I have a Conventional 30 year mortgage (sonyma) on this double and we want to turn this double into an income property, do I need to refinance?
For some reason I think I do but I think other people don’t and purchase the second mortgage through a different financial institution.
No you do not, not unless somewhere in your mortgage agreement you signed that this will be your primary residence. For your own financial safety I would get a lawyer and do a quit claim deed to an LLC that you and your wife own.
Actually, everything with the house is in my name. She is not any document. House was purchased before we were married.
---------- Post added at 01:46 PM ---------- Previous post was at 01:45 PM ----------
I do remember something about primary residence … 
I know with my mortgage it has to be my primary residence for 3 years I believe but that was for the first time home-buyer credit thing a few years ago.
edit: now’s the perfect time to refinance with pen fed lol.
You need to let them know…most won’t mind unless it is VA or FHA or something special. You will need to change your insurance
First time home buyer thing is for 5 years of primary residence as of 2012. $125 is taken off your mortgage every month for 5 years until it reaches the $7500.
You can leave the residence early but you forefit the balance. Just got done doing all this lol
I bought my place in 2009 (first time home buyers).
sonyma makes it complex, check with them.
http://www.nyshcr.org/Topics/Home/Buyers/SONYMA/FederalRecaptureTax.htm
Yea, I just called my bank. They couldn’t provide me this info over the phone because it is not available to them so I will need to look at my papers tonight.
Funny they don’t know how long I need to reside in my house.
I wouldn’t bother with the LLC at this point…it will raise a red flag with the bank and there are easier and cheaper ways to protect yourself with investment properties
the process of a quitclaim deed would likely default your loan anyway as many specifically note this. since an LLC is often setup to protect one from the debts of a business i doubt the bank is going to be too interested in getting involved with it as it would mean you would be a step further away from liability if you were to default. chances are they would still want you to personally sign onto the mortgage.
most of the other protections of the LLC will pretty much become meaningless when the shit really hits the fan. when you make a repair to an electrical outlet like a good landlord and the place burns down from an electrical short the next day killing the tenants…the LLC will mean nothing.
don’t check with your bank, check with sonyma.
Well I will need to refinance to get out of Sonyma because they require the house to be my permanent resident for the life of the loan.
yikes, and I thought some of the 5 year ones for first home club or obama bucks were bad
Go with penfed. Hopefully you have at least 20% in equity and a few bucks for closing. They have amazing rates right now.
yeah… I refi’d my sonyma to penfed on their 5/5 at 3.125 with them paying almost all closing costs. they also have regular 30 years at almost that rate but no closing assistance. Super easy refi for me.
5 years with the First Time Home Buyers club…which is different from the Government issued one a few years back.