When you are purchasing an investment property, apply for an investment property loan. Do not purchase an investment property and apply for a second home loan for the sole purpose of getting a lower interest rate. To do this would be mortgage fraud.
Here are a few examples of how this can affect you:
1. Insurance. The lender will make sure you have the correct insurance policy before closing. If you have a second home policy but a renter occupies the property, you run the risk that an accident would not be covered.
2. The lender could send personal mail to the second home address that could be opened by the renter, thereby compromising your private information.
3. Or, the lender could send mail to the second home address that bounces back as undeliverable because the renter lives there. This would tip the lender to do more investigation.
If the lender finds out they have been defrauded, it can result in fines, penalties, or maybe even jail time.
Contact us for competent mortgage advice.  We offer a variety of products and services, ask us how we can assist you today.

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