Lower Mortgage Rate for house hacking?

Question

Dave Skow · Answer

@Jacqui Myers- if you are able to  live  in a property  as your primary residence - the  mortgage rates  avaiable  will be lower / better  than if you need  to classify it as a rental  property

Lawrence Potts · Answer

Hey @Jacqui Myers, I agree with everyone else: your rate is most likely lower because it’s owner occupied. If you were to buy as purely a rental, you’d probably have a higher rate and higher down payment needed.

I don’t think this gives you a lower down payment on future purchases either unless that next purchase is the new owner occupied home. Some mortgage products are lower interest rates as well like FHA (higher PMI though).

Hope that helps!

Christian Bachelder · Answer

Hey Jacqui,

The reason someone told you that is much simpler than it sounds. Primary residence (if you live in the property) rates are lower than investment rates and usually require significantly less of a down payment. There is no special clause or anything in the lending guidelines for house hacking, but you do get access to the rates for primary residences, which on average, are significantly less than second home and and true investment property rates.

Cole Maurer · Answer

Hi Jacqui! I haven’t heard of a lower rate when the situation is exactly as you have explained. However, could you mean because you will be living in the property you are buying, you are eligible for home owner rates and down payment options? When you owner occupy the property you get more flexibility on rates and down payment options. This is as opposed to investor loan rates and 20% or more down payment requirements on non-owner occupied investment property. Definitely something to consult with a local lender! Try the network tab on BP to connect with a lender in your state. Most lenders are happy to chat with you and help sift through your options!

Good luck investing!

Lower Mortgage Rate for house hacking?

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