Posted on: 23rd Feb, 2010 02:48 pm
Hi,
Bought home in California in 2005. One mortage for $520. Never refinanced. Lived in the home from purchase date through 2008. I've rented it out for 20 months to figure out what to do and have decided to walk. This was a nonrecourse loan for the purpose of buying an owner occupied residence. Does the fact that I moved out and rented it change it from being a nonrecourse purchase money loan? Some people say its still nonrecourse as the loan only needs to be used to ACQUIRE a primary residence. It doesn't have to remain a primary. Thoughts?
Bought home in California in 2005. One mortage for $520. Never refinanced. Lived in the home from purchase date through 2008. I've rented it out for 20 months to figure out what to do and have decided to walk. This was a nonrecourse loan for the purpose of buying an owner occupied residence. Does the fact that I moved out and rented it change it from being a nonrecourse purchase money loan? Some people say its still nonrecourse as the loan only needs to be used to ACQUIRE a primary residence. It doesn't have to remain a primary. Thoughts?
Hi lextreme,
In my opinion, the mortgage will still be considered as a non-recourse loan. Even though you have not lived in the property of late, you had used the property as your principal residence for 3 years or so. If the mortgage note shows that the loan is a non-recourse one, it remains so till the time you refinance it. Since you have not refinanced the existing mortgage, it will remain as a non-recourse loan.
In my opinion, the mortgage will still be considered as a non-recourse loan. Even though you have not lived in the property of late, you had used the property as your principal residence for 3 years or so. If the mortgage note shows that the loan is a non-recourse one, it remains so till the time you refinance it. Since you have not refinanced the existing mortgage, it will remain as a non-recourse loan.