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Posts: 4
Registered: ‎12-21-2009

Refinance and owner occupancy clause - HELP PLEASE



I need some serious advice, please help. I've been living in my home for 3 years and recently just applied to refinance my property approximately 2.5 months ago. Since making the initial application, my company has decided to relocate me to a different state. I now want to rent out the home after the refinance completes. 


I am now in the 3 day of recission period and almost about to get funded but i saw an owner occupancy clause as i read through my docs last night that states the below, which i wasn't aware of. I'm worried i might be doing wrong.


"Borrower shall Occupy, establish, and use the property as Borrower's principal residence within 60 days after the execution of this security Instrumet and shall continue to occupy the property as Borrower's principal residence for at least one year...........or unless extenuating circumstances exist which are beyond the borrower's control".


Now here are the questions


1) I know that I won't be able to stay in the home that i am refinancing for 60 days let along a year, afterwards because my work is moving me within the next week, is this considered "extenuating circumstances which are beyond the borrowers control". Would it be legal for me to get funded on my refinance now? 

2) Should i go ahead with the refinance or should i terminate the refinance?

3) Am i allowed to rent out my home right after it gets funded? 





Redfin Coordinator
Posts: 105
Registered: ‎05-19-2010

Re: Refinance and owner occupancy clause - HELP PLEASE

Honestly Mike, the best thing to do is discus the situation with your current lender to seek another loan product applicable to your situation.  From the sound of it, the type of loan product will require this as your permanent residence for the next year minimum.  I would absolutely request that this be considered an extenuating circumstance that would preclude you from living in the property, and since it has just come up this far in the process, I would think this could be considered.


Have that honest conversation with your lender, or shop around if they cant' do anything for you.


Good Luck




Posts: 35
Registered: ‎10-07-2012

Re: Refinance and owner occupancy clause - HELP PLEASE

Call a real estate attorney. Discussing this with your lender will just make it easier for your lender to deny the refi, unless you really want to refi at a higher rate.

Redfin Agent
Posts: 546
Registered: ‎04-01-2009

Re: Refinance and owner occupancy clause - HELP PLEASE



I might post your question on the Mortgage Forum, there are quite a few lenders who post on there and they might shed some light for you...


Best of luck

Kathi Kelly-Billings | Redfin Seattle Senior Agent

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