Quote:
Originally Posted by manaboutown
Typical residential mortgages are for owner occupied first and/or second homes. The mortgagor usually is required by the lender to sign some paperwork to the effect that the mortgagor agrees to occupy the dwelling and not to rent it out. If one rents out a mortgaged home it should be financed as a rental which is understandably usually at a little higher interest rate.
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CORRECT! If you have a commercial mortgage, which is for an income producing property, ie, for renting, you can't live in/on the property. The interest rate difference is MORE than a little higher!
Its not that the mortgage company doesn't care, the issue is about the insurance of the property in case of an accident. If you have residential insurance, and are renting it out, and the house burns, or there is a liability claim, then the owner has a big problem, as in uncovered. Also, some residential insurance companies, like AMICA, won't cover a commercial property, and will put disclaimers all over your residential liability insurance that any events on the commercial property is not covered.
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