Say refi for my current owner occupied primary home is going to close 9/5. Can I get into contract to buy a new primary owner occupied house on 9/2, expected to close on 10/2? Different lenders. How will the new lender find out about the old refi? Can I say that I was just shopping for rates if they ask about the credit hit?
Also will the new bank even care if my refi for old bank closes ~20 days prior? Will they deny their application or will inform the old bank (whose refi just closed a few days back)?
Lien on your asset will change so your new loan may get impacted last minute? if your new loan closes first, the refi loan would face the same problem the last minute?
Thanks for the thoughts! Maybe a noob question, but how will the new bank know about the lien on the old house changing?
Also will the new bank even care if my refi for old bank closes ~20 days prior? Will they deny their application or will inform the old bank (whose refi just closed a few days back)?
This is called “Occupancy Fraud” and is easy to discover.
Post closing 2 out of 10 loans goes through a QC audit. If your loan is picked for audit, they will find out.
When you change your mailing address or terms on your insurance policy, they will find out.
There are other ways this kind of fraud can be found out, but these are the two most common causes of lender’s calling their note due for occupancy fraud…
At closing of your refi your signing (or have signed already) an Occupancy Certification. That, plus your terms on the Note, and the 1003, will all be used to convict.
This Occupancy Fraud has saved about .375 in rate compared to a Non-Owner or investment purchase term.
Would it be fair to say you let your loan officer know, but not the Underwriter? Most LO’s are “transaction” focused. They don’t want a deal killed so my guess is that the LO just let that information sleep with the fishes. All Underwriters are risk averse. I’d expect an Underwriter to stop the process in it’s tracks when this sort of scenario is broached.
Underwriter is an internal department of the lender so I believe he/she knows. May be the new Primary is a new construction, so it doesn’t matter Re-read the OP situation, he signs a new purchase contract 3 days earlier than the re-fi date, I signed two weeks after the re-fi date. Because it is a new construction, the mortgage doesn’t kick in till 6 months later
I would look through your closing package. A certification of occupancy statement is likely in there. They are commonplace today and will give guidance on what the lender’s expectations are.
Re-read the OP situation, he signs a new purchase contract 3 days earlier than the re-fi date, I signed two weeks after the re-fi date. Because it is a new construction, the mortgage doesn’t kick in till 6 months later 