{"id":4050,"date":"2024-10-14T10:29:24","date_gmt":"2024-10-14T15:29:24","guid":{"rendered":"https:\/\/tomo.com\/blog\/?p=4050"},"modified":"2025-02-10T12:55:37","modified_gmt":"2025-02-10T17:55:37","slug":"what-does-a-primary-residence-mean-when-getting-a-mortgage","status":"publish","type":"post","link":"https:\/\/tomo.com\/blog\/what-does-a-primary-residence-mean-when-getting-a-mortgage\/","title":{"rendered":"What does a \u201cprimary residence\u201d mean when getting a mortgage?"},"content":{"rendered":"\n<p>A primary residential mortgage is the loan you get for the place you actually call home\u2014your main residence. It\u2019s not for an investment property or a vacation spot. It\u2019s where you live day-to-day. Lenders typically give better interest rates and terms on these because you&#8217;re more likely to stay on top of payments when it\u2019s your home.&nbsp;<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Now, you might be asking: Do I have to move into a home right away if I am using a primary residential mortgage?<\/h3>\n\n\n\n<p><\/p>\n\n\n\n<p>Here\u2019s where it gets interesting: The move-in requirements depend on the <strong>type of loan<\/strong> you\u2019re using.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>For FHA Loans<\/strong>: If you\u2019re using an <strong><a href=\"https:\/\/tomo.com\/blog\/is-an-fha-loan-a-good-idea\/\" title=\"FHA loan\">FHA loan<\/a><\/strong>, <strong>you must move into the property within 60 days of closing<\/strong> and live there as your primary residence. This is a strict rule, and you have to stay there for at least <strong>one year<\/strong>. If you don\u2019t follow this, you may violate the terms of the loan.<\/li>\n\n\n\n<li><strong>For Conventional Loans<\/strong>: The situation is a bit more flexible. <strong>Conventional loans<\/strong> don\u2019t have the same strict 60-day rule, but lenders still expect that the home will become your primary residence fairly quickly after closing. While there isn\u2019t a regulatory requirement like FHA\u2019s, claiming the property as your primary home and then not occupying it can lead to serious consequences, like <strong>fraud<\/strong>. So, while you have more flexibility with a conventional loan, you still need to take the lender\u2019s requirements seriously.<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">But wait\u2014what about renovations?<\/h3>\n\n\n\n<p><\/p>\n\n\n\n<p>Now, if you&#8217;re going for an <strong>FHA 203(k) loan<\/strong> (basically, a loan that lets you fix up a home that needs a lot of work), there\u2019s a little wiggle room on that 60-day rule. Since you\u2019ll likely need time to get the place habitable (you can&#8217;t live in a construction zone, right?), the FHA is cool with letting you stretch the move-in timeline.<\/p>\n\n\n\n<p>Here\u2019s how that works:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>FHA 203(k) loans let you delay the <strong>move-in deadline<\/strong> as long as you can show that you intend to move in <strong>after the renovations<\/strong> are complete.<\/li>\n\n\n\n<li>You still gotta show the home is gonna be your <strong>primary residence<\/strong> once the work is done, though. The main idea here is to give you a little breathing room if the home needs major work before you can live in it.<\/li>\n<\/ul>\n\n\n\n<p>For <strong>conventional loans<\/strong>, things are a little different. The 60-day rule isn\u2019t usually as strict. You\u2019re still expected to move in promptly, but you will likely have more leniency on when you move in especially when facing down some serious repairs.&nbsp;<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Communicating with your lender<\/h3>\n\n\n\n<p><\/p>\n\n\n\n<p>You need to talk to your lender early on. If you&#8217;re dealing with a house that needs major renovations, you might need to ask for a <strong>longer timeline<\/strong> before you can move in. Just make sure you:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Document the renovation needs<\/strong>: Show them exactly what needs fixing.<\/li>\n\n\n\n<li><strong>Stay within the FHA guidelines<\/strong>: Your property still has to meet FHA standards once the repairs are finished.<\/li>\n<\/ol>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Are there tax benefits or cost benefits to getting a primary mortgage?<\/h3>\n\n\n\n<p><\/p>\n\n\n\n<p>Yes, there are some solid <a href=\"https:\/\/tomo.com\/blog\/what-are-the-tax-benefits-of-owning-a-home\/\" title=\"tax and cost benefits\">tax and cost benefits<\/a> to getting a primary residence mortgage:<\/p>\n\n\n\n<p><\/p>\n\n\n\n<p><strong>Mortgage interest deduction<\/strong>: If you itemize deductions, you can usually deduct the interest you pay on up to $750,000 of mortgage debt (for loans after 2017). This reduces your taxable income.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<p><strong>Property tax deduction<\/strong>: You can also deduct up to $10,000 of property taxes paid annually, including your primary home.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<p><strong>Lower interest rates<\/strong>: Primary mortgages typically come with lower <a href=\"https:\/\/tomo.com\/mortgage\/rates?utm_source=tomo_blog\" title=\"interest rates \">interest rates <\/a>compared to second home or investment property loans, meaning you save on monthly payments over time.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<p>For example on a $300,000 loan<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>A <strong>primary mortgage<\/strong> might come with an interest rate of <strong>6.5%<\/strong>.<\/li>\n\n\n\n<li>A <strong>second home mortgage<\/strong> could have an interest rate around <strong>7.5%<\/strong>.<\/li>\n\n\n\n<li>An <strong>investment property loan<\/strong> might go up to <strong>8%<\/strong> or higher.<\/li>\n<\/ol>\n\n\n\n<p><\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>Loan type<\/td><td>Rate<\/td><td>Term (years)<\/td><td>Approx. monthly payment<\/td><td>Total paid over 5 years<\/td><td>Total paid over 10 years<\/td><td>Total paid over 30 years<\/td><\/tr><tr><td>Primary mortgage<\/td><td>6.5%<\/td><td>30<\/td><td>$1,896.20<\/td><td>$113,772.02<\/td><td>$229,261.81<\/td><td>$682,633.47<\/td><\/tr><tr><td>Second home mortgage<\/td><td>7.5%<\/td><td>30<\/td><td>$2,097.64<\/td><td>$125,857.32<\/td><td>$251,735.93<\/td><td>$755,151.67<\/td><\/tr><tr><td>Investment property loan<\/td><td>8%<\/td><td>30<\/td><td>$2,201.29<\/td><td>$132,077.40<\/td><td>$263,919.36<\/td><td>$792,465.74<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">How does down payment play in? <\/h3>\n\n\n\n<p><\/p>\n\n\n\n<p><strong>Lower <a href=\"https:\/\/tomo.com\/blog\/what-should-i-put-down-for-my-down-payment\/\" title=\"down payment\">down payment<\/a> options<\/strong>: With a primary mortgage, you can often qualify for government-backed loan programs (like <a href=\"https:\/\/tomo.com\/blog\/is-an-fha-loan-a-good-idea\/\" title=\"FHA\">FHA<\/a> or <a href=\"https:\/\/tomo.com\/blog\/who-can-get-in-on-a-va-loan\/\" title=\"VA loans\">VA loans<\/a>) that allow for lower down payments, sometimes as low as 3.5%.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Can an FHA loan only be used for a primary residence?<\/h3>\n\n\n\n<p><\/p>\n\n\n\n<p>Yep, an FHA loan is strictly for your primary spot. The Federal Housing Administration (FHA) backs these loans to help you snag a home you actually live in full-time.&nbsp;<\/p>\n\n\n\n<p>Most other loan types can also be used for a primary residential mortgage. Whether you&#8217;re looking at a conventional loan, <a href=\"https:\/\/tomo.com\/blog\/who-can-get-in-on-a-va-loan\/\" title=\"VA loan\">VA loan<\/a>, USDA loan, or even a jumbo loan, these can all be applied to your primary residence. Each has its own set of perks and requirements, but they\u2019re all designed to help you secure the home where you\u2019ll live full-time.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">How do I get a primary residential mortgage?<\/h3>\n\n\n\n<p><\/p>\n\n\n\n<p>Getting a primary residence mortgage can seem like a maze, but here\u2019s the steps broken down.&nbsp;<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Check your credit score<br><\/strong>Your <a href=\"https:\/\/tomo.com\/blog\/what-credit-score-do-i-need-to-buy-a-home\/\" title=\"credit score\">credit score<\/a> plays a big role in the mortgage game. Grab your credit report, tidy up any blemishes, and aim for a score of 620 or higher for conventional loans. FHA loans might be a bit more forgiving if your score isn\u2019t perfect and you can get approved with scores at 580 or in certain scenarios even 500.<\/li>\n\n\n\n<li><strong>Pinpoint your budget<br><\/strong>Know your financial limits to avoid falling in love with a home you can\u2019t afford. Check out our <a href=\"https:\/\/tomo.com\/mortgage\/affordability?utm_source=tomo_blog\" title=\"affordability calculator\">affordability calculator<\/a> to take charge of your purchasing power.&nbsp;<\/li>\n\n\n\n<li><strong>Get pre approved<br><\/strong><a href=\"https:\/\/tomo.com\/mortgage\/app\/preapproval?utm_source=tomo_blog\" title=\"Pre approval\">Pre approval<\/a> is your golden ticket. It shows sellers you\u2019re not just window-shopping and helps you figure out your budget. Chat with one of our pre approval advisors today and get started <a href=\"tel:7375102523\" target=\"_blank\" rel=\"noreferrer noopener\">737-510-2523<\/a><\/li>\n\n\n\n<li><strong>Pick the right mortgage<br><\/strong>Not all loans are created equal. Decide whether a conventional loan, FHA loan, VA loan, or another option fits your needs. Weigh factors like <a href=\"https:\/\/tomo.com\/blog\/what-should-i-put-down-for-my-down-payment\/\" title=\"down payment,\">down payment,<\/a><a href=\"https:\/\/tomo.com\/mortgage\/rates?utm_source=tomo_blog\" title=\" interest rates,\"> interest rates,<\/a> and <a href=\"https:\/\/tomo.com\/blog\/15-year-or-30-year-mortgage\/\" title=\"loan terms\">loan terms<\/a> to find your perfect match.<\/li>\n\n\n\n<li><strong>Find a real estate agent<br><\/strong>A <a href=\"https:\/\/tomo.com\/blog\/new-rules-on-agent-commissions-post-nars-disclosure-what-you-need-to-know\/\" title=\"good agent\">good agent<\/a> is your best friend. Look for someone with solid reviews and a knack for your desired area. They\u2019ll help you with property searches, negotiations, and all that paperwork.<\/li>\n\n\n\n<li><strong>Start house hunting<br><\/strong>Time to find your dream home. Visit properties, attend open houses, and consider things like location and <a href=\"https:\/\/tomo.com\/blog\/what-is-a-home-appraisal-and-how-much-does-it-really-cost\/\" title=\"condition\">condition<\/a>. Narrow down your choices and make an offer on a place you can see yourself living in.<\/li>\n\n\n\n<li><strong>Apply for the mortgage<br><\/strong>Ready to make it official? Complete your <a href=\"https:\/\/tomo.com\/mortgage\/app\/preapproval?utm_source=tomo_blog\" title=\"mortgage application\">mortgage application<\/a> with your chosen lender. We\u2019d recommend choosing a lender like us, who charges no origination fees (we also generally have rates 0.48 points lower than competitors).\u00a0 Provide the necessary documentation and details about your future home.<\/li>\n\n\n\n<li><strong>Get a home inspection<br><\/strong>Don\u2019t skip this step. A <a href=\"https:\/\/tomo.com\/blog\/do-i-need-to-worry-about-a-home-inspection\/\" title=\"home inspection \">home inspection <\/a>can reveal hidden issues. Hire a pro to check out the property, review the report, and negotiate any repairs or credits with the seller if needed.<\/li>\n\n\n\n<li><strong>Understand closing costs<br><\/strong><a href=\"https:\/\/tomo.com\/blog\/how-much-are-closing-costs\/\" title=\"Closing costs\">Closing costs<\/a> can include fees for appraisal, title insurance, and attorney services. These can add up to 2-5% of the loan amount. Get a detailed estimate from your lender and budget for these costs early in the process.<\/li>\n\n\n\n<li><strong>Review the loan estimate<br><\/strong>After applying, you\u2019ll receive a Loan Estimate form detailing the terms, interest rate, and costs associated with your <a href=\"https:\/\/tomo.com\/blog\/what-is-a-mortgage-and-why-is-it-important\/\" title=\"mortgage\">mortgage<\/a>. Review this document carefully to ensure it aligns with what was discussed and shop around to make sure you are getting the best rate.&nbsp;<\/li>\n\n\n\n<li><strong>Understand escrow accounts<br><\/strong>An<a href=\"https:\/\/tomo.com\/blog\/what-is-a-mortgage-escrow-account\/\" title=\" escrow account\"> escrow account<\/a> might be set up to hold funds for property taxes and insurance, which are then paid by your lender on your behalf. Confirm how your escrow account works and how much you\u2019ll need to contribute.<\/li>\n\n\n\n<li><strong>Know your mortgage rate options<br><\/strong>You can choose between a<a href=\"https:\/\/tomo.com\/blog\/whats-better-a-fixed-rate-or-adjustable-rate-mortgage-also-known-as-arm\/\" title=\" fixed-rate mortgage (where the rate stays the same) and an adjustable-rate mortgage\"> fixed-rate mortgage (where the rate stays the same) and an adjustable-rate mortgage<\/a> (where the rate can change). Understand the pros and cons of each type and select the one that aligns with your financial situation and future plans.<\/li>\n\n\n\n<li><strong>Plan for future financial changes<br><\/strong>Consider how potential future changes, such as job changes or <a href=\"https:\/\/tomo.com\/blog\/tomo-mortgage-rates-monitor\/\" title=\"interest rate fluctuations,\">interest rate fluctuations,<\/a> could impact your mortgage. Plan accordingly and consider options like refinancing if your financial situation changes.<\/li>\n\n\n\n<li><strong>Finalize the loan<\/strong><strong><br><\/strong>This is where everything comes together. Your lender will give you a final review and send a closing disclosure detailing the terms and costs. Double-check everything to make sure it\u2019s all correct.<\/li>\n\n\n\n<li><strong>Close on the home<\/strong><strong><br><\/strong>The final step: closing. Sign the papers, pay any closing costs, and get the keys to your new place. Congratulations, you\u2019re officially a homeowner!<\/li>\n<\/ol>\n\n\n<div style=\"padding-top:var(--wp--preset--spacing--30);padding-bottom:var(--wp--preset--spacing--30);padding-left:var(--wp--preset--spacing--30);padding-right:var(--wp--preset--spacing--30);margin-top:var(--wp--preset--spacing--30);margin-bottom:var(--wp--preset--spacing--30);margin-left:0;margin-right:0;\" class=\"has-link-color wp-elements-c54b177fd5d2f341f8967a20726f2ac0 wp-block-post-author has-text-color has-contrast-color has-background has-tertiary-background-color has-large-font-size\"><div class=\"wp-block-post-author__content\"><p class=\"wp-block-post-author__name\"><a href=\"https:\/\/tomo.com\/blog\/author\/clairegtomonetworks-com\/\" target=\"_self\">Claire Gallaudet<\/a><\/p><p class=\"wp-block-post-author__bio\">Claire is a Mortgage Analyst at Tomo, where she explores the data and trends shaping the housing market. She is especially interested in how economic forces impact homebuyers. A Seattle native, she now lives in Austin, where she balances analysis and communications with teaching yoga and walks around the lake with her dog.<\/p><\/div><\/div>\n\n\n<p>If you&#8217;re ready to start your journey to homeownership, <a href=\"https:\/\/tomo.com\/mortgage\/app\/preapproval?utm_source=tomo_blog\" title=\"\">get pre approved with Tomo Mortgage today.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A primary residential mortgage is the loan you get for the place you actually call home\u2014your main residence. It\u2019s not for an investment property or a vacation spot. It\u2019s where you live day-to-day. Lenders typically give better interest rates and terms on these because you&#8217;re more likely to stay on top of payments when it\u2019s [&hellip;]<\/p>\n","protected":false},"author":31,"featured_media":4063,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[38],"tags":[],"class_list":["post-4050","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mortgage-dictionary"],"aioseo_notices":[],"jetpack_featured_media_url":"https:\/\/tomo.com\/blog\/wp-content\/uploads\/2024\/10\/how-to-get-a-second-mortgage-tomo-mortgage-jpg.webp","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/posts\/4050","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/users\/31"}],"replies":[{"embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/comments?post=4050"}],"version-history":[{"count":2,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/posts\/4050\/revisions"}],"predecessor-version":[{"id":4103,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/posts\/4050\/revisions\/4103"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/media\/4063"}],"wp:attachment":[{"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/media?parent=4050"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/categories?post=4050"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/tags?post=4050"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}