House Hacking Question

[Peter Keddis]

Hello everyone. Quick piece of advice. I have a home that is already paid of. I would like to purchase another house as a conventional loan and "house hack it" to get better interest on the home and eliminate taxes on capital gains. As far as I understand I have to live there so that means I have to have a room for me and change my address to the other property. But I was wondering if having another house under my name would cause any legal issues? can someone give my any piece of advice. Much appreciated !! 

[Benjamin Aaker]

Not an attorney here but: Putting a house in your name can be cheaper as the loan terms are better if you can get an FHA loan. Having the house in your name exposes your personal finances to liability should a slip-and-fall happen at the property. Consider a big umbrella policy with your insurer if you plan to do this. Additionally, the house that you will be moving out of will become a rental, which is a business. FHA doesn't like this. They audit banks sometimes and your bank may recall your loan, forcing you to pay back the entirety of the principal, or refinancing with a commercial loan. This could be very stressful.I recommend talking to your banker about it first.