Guest This is Bob! March 29, 2010 Share March 29, 2010 sorry to burst your bubble or rain on your parade but unless you refi the mtg with permissionn to rent out the home, you may be in voilation of the mtg and bank not gonna be happy. if your upside down as you say, i don't think you'l be able to refi it. so, consider althernates Link to comment Share on other sites More sharing options...
flowerseller March 29, 2010 Share March 29, 2010 sorry to burst your bubble or rain on your parade but unless you refi the mtg with permissionn to rent out the home, you may be in voilation of the mtg and bank not gonna be happy. if your upside down as you say, i don't think you'l be able to refi it. so, consider althernates Being a little hard on the guy huh Bob? Link to comment Share on other sites More sharing options...
Brian Ward March 29, 2010 Share March 29, 2010 sorry to burst your bubble or rain on your parade but unless you refi the mtg with permissionn to rent out the home, you may be in voilation of the mtg and bank not gonna be happy. if your upside down as you say, i don't think you'l be able to refi it. so, consider althernates I've never seen a debt covenant that required you live in the home as your primary residence for more than 1-3 years. Since he's fulfilled that obligation, there shouldn't be a problem. Link to comment Share on other sites More sharing options...
phisigs79 March 29, 2010 Author Share March 29, 2010 I have been in my house for 4 years and renting it is not an issue. My loan doesn't state I have to live in it. Where did you get this info? is this factual statments your coming up with or just what you think? Link to comment Share on other sites More sharing options...
Brian Ward March 29, 2010 Share March 29, 2010 I have been in my house for 4 years and renting it is not an issue. My loan doesn't state I have to live in it. Where did you get this info? is this factual statments your coming up with or just what you think? Chris, when you got your loan, there was likely an owner-occupant clause in the debt covenant. One of the papers you signed at closing should have contained it. Banks charge higher rates on rental property (I usually see 2-4 points) due to the increased risk. However, the requirement to occupy the property (not use it as rental) is usually for 1 year and then you've fulfilled the requirement and you're free to rent it out if you want. I believe even the FHA loan agreement is only for 1 year of occupancy. Unless you got a very strange loan, you shouldn't have a problem. As an accountant, I'm sure you're aware, but when you're ready to sell the property (down the road) you may be required to pay capital gains (if there are any) unless you've lived there 2 of the last 5 years. There is a way to defer the tax through a 1031 exchange. You'll want to remember that when you sell. Link to comment Share on other sites More sharing options...
Der ABT March 29, 2010 Share March 29, 2010 (edited) Doesnt capital gains not kick in till you reach like 500k lifetime profit. Havent done indiv tax in a while so i could be wrong 1031 is great (once you determine your other properties in the time allowed) sorry not trying to move this off topic (just an accontant/auditor as well) Edited March 29, 2010 by Der ABT Link to comment Share on other sites More sharing options...
Brian Ward March 29, 2010 Share March 29, 2010 Doesnt capital gains not kick in till you reach like 500k lifetime profit. Havent done indiv tax in a while so i could be wrong 1031 is great (once you determine your other properties in the time allowed) sorry not trying to move this off topic (just an accontant/auditor as well) When a house is your primary residence, you are not required to pay capital gains when you sell a property (possibly with a 500k lifetime cap, I'm not sure about that much detail). However, if you have not lived in the house for 2 of the last 5 years (prior to the sale) then it is no longer considered your primary residence and the exception to capital gains taxes does not apply. Seeing as how Chris is upside down in the home, this may not be a consideration, but something I thought I'd bring up. By not knowing the key term "1031 exchange" my dad had to pay a bunch of money in capital gains on one of his properties. He, of course, doesn't work with that accountant any more. Link to comment Share on other sites More sharing options...
Guest This is Bob! March 29, 2010 Share March 29, 2010 i said may be in violation. so looks like you may be okay. but other peopple saw that it was possible problem, to, so i dont think i was hard but i give credit for trying to be funny to Link to comment Share on other sites More sharing options...
phisigs79 March 29, 2010 Author Share March 29, 2010 Just check a my loan paperwork says one year and yes i am aware of capitals gain but i dont think i will have this issue since i am pretty sure i wont make any money on this property but it would be nice if i did. Link to comment Share on other sites More sharing options...
phisigs79 July 21, 2010 Author Share July 21, 2010 Ok well after 3 months of dealing with a short sale with two banks we now have approval on our offer. Move date with be around August 20th. House is located in Haymarket. Cannot wait to setup my new tank (120g RR). I am really excited. If anyone is looking to rent a 3 bedroom townhouse in gainesville let me know. Link to comment Share on other sites More sharing options...
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