Denied Loan just before closing due to not beleiving i'm moving

[Jacob Dimick]

So I was a week out before closing on 2 unit in South Portland and the underwriter denied my loan. First of all I feel like the bank I used should have never had me pay for an appraisal if the suspected my loan with be denied. The underwriter said that they don't believe I'm going to be moving into the new two unit. Right now I have been living in a 2 unit for over three years that I bought Conventional. The new 2 unit is 1.5 miles down the road but has larger units along with a dining room, full back yard fenced in, deck and 3 bedroom unit. I'm 100 percent moving into this new two unit and showed the underwriter my lease agreements on my current house. The new 2 unit i'm buying with 15% down Conventional. Is this normal to have the underwriter deny the loan 1 week before closing?? They said the only scenario is that I either buy it as investment property or refinance my current house as an investment property. So i'm headed in the route of refinancing my house now which was currently under a different bank mortgage at a much lower rate than i'm having to refinance too. Any comments and suggestions??

[Chris Mason]

Originally posted by @Wayne Brooks:

@Jacob Dimick Sounds like maybe you have a sucky lender.  It looks like you’ve given sufficient evidence, even though this issue is common.  Maybe the Chris below can suggest how to escalate/overcome this.

@Chris Mason. It really makes no sense to me that having the OP refi his current house into an investment loan makes it any more truly likely he will move into the new property....you can certainly remain/live in a house with a non owner occupied loan.

 This one is pretty straightforward -- find a new lender.

If you're working with an independent wholesale broker, should be pretty easy. They already have your paperwork, just needs to be submitted with a new lender. If you were my client (this would have been unlikely to come up given the evidence you cited, but if it somehow did....), I'd cover the new appraisal fee, since I share responsibility for this due to having been the one to pick the lender.

If you're working with a direct lender, then it's more  of a pain in the butt, and you will likely be on the hook for the new appraisal fee.