[manaboutown]

Over the last several years I refinanced two separate single family residences to obtain lower interest rates. One I financed as a second home, the other as a rental/investment property.

If I recall correctly when I signed the mortgage documents on my second home I had to sign a paper stating that I was actually using the property as a personal residence and intending to continue to do so (indefinitely). Since a mortgage lender receives updated copies of the insurance policy on a property at its yearly renewal a policy can of course be checked by the lender see if it remains a homeowner's policy.

Refinancing the rental property required I pay 1/2% higher rate of interest. That property is insured as a rental property and of course that lender requires a copy of the insurance policy on the house at each renewal.

Now one could opt to inform the lender he wanted an owner occupied mortgage and insure as a homeowner while planning to use the property as a rental, then doing so. I call that living dangerously. To more or less quote Warren Buffet we find out who has been swimming naked when the tide goes out.