Refi and intent to occupy
Homeowners who want to move out and rent out might be tempted to sneak around these issues by refinancing before they vacate their current home. That's a sensitive subject because it involves intent and loan fraud.
Technically, a borrower must intend to occupy the property and sign an affidavit to that effect at closing to obtain a new owner-occupied loan. Yet, Parkes says intention is "subjective and fluid."
"You could intend (to live there)," he says, "and then get a job transfer or find out your wife is pregnant and want to move and upgrade to a bigger house. That gets into a gray area. You can intend a lot of things."
One year of residency is often cited as a guideline to determine intent to occupy. But that's not an absolute rule.