The Importance of Full Disclosure on Mortgage Apps

Recently, The New York Times  wrote an article on mortgage application full disclosure. Mortgage lenders have good reason to require borrowers to specify whether they intend to live in a house they are financing.

“If it’s not your primary residence, the chance of you defaulting is very high versus your primary residence, where you’re living with your family,” said Tim Coyle, the senior director for financial services at LexisNexis Risk Solutions, which develops risk mitigation tools for banks.

On a loan application, borrowers must attest to whether the residence is a primary, second or investment property. At closing, they must sign an owner occupancy affidavit saying they will occupy the home themselves within 60 days.

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