Are you are planning to live in your investment property? Then you might qualify for the benefits of an owner-occupied loan. The good thing to note about an owner-occupied home loan is that you can use home refinance to switch to an investment loan later on. However, there are some rules that apply. Here are four things to know about owner-occupied loans.

1. Owner-Occupied Loans Tend To Have Better Rates

One big reason that home buyers chose an owner-occupied loan is because of the competitive home loan rates. 

However, if you are wanting to switch from an owner-occupied loan to an investment property, then you can still qualify for competitive home loan rates. Generally speaking, it is the high cost of closing fees that drive up the cost of an investment loan, so look for a loan provider with low closing fees if you want to refinance. 

2. You Can Refinance To A Investment Loan Easily, Even If You Have An Owner-Occupied Loan

You may be an owner-occupier and wish to make rental income from your property soon or in the future. If you are looking for an investment loan, then it is possible to switch with home refinance later down the road, even if you initially qualified for an owner-occupied loan. All you need to do is let your lender know and work with them to refinance. 

3. You Can Still Rent Out Rooms With An Owner-Occupied Loan

As long as the home is your primary residence, you can still rent out a room without it impacting your home loan or mortgage. If you decide to move out of the property and rent it out entirely, that is when you will need to switch home loans and use a home refinance specialist.

4. You Will Need To Intend To Reside In Your Home 

To qualify for an owner-occupied loan, you need to intend to live in your new home as your primary residence. Generally speaking, the rule is that to qualify as an owner-occupier, you need to live in the residence for at least twelve months.

However, if you still wish to make an income from your home during that time, you can rent out rooms, as stated in the point above, or you can have part of your home as accommodation on sites such as Airbnb, as long as it is still your primary residence as well.

Once the twelve months are up, you can use home refinance to switch to an investment loan.

To learn more about owner-occupied loans or refinancing, and to find out if you qualify, chat to a friendly specialist today. Reach out to a home refinance service near you to learn more.

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