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We have an offer on a property we intend to live as primary residence. The property is tenant occupied and the tenant has lease for another 6 months and I have to honor the lease as per seller. We like the home and intend to move after the tenant leaves the property. For primary residence homes the expectation from the lender is to occupy the home within 60 days, please advise if there will be any legal consequences as our intention is to occupy after the lease ends which is 6 months.

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    You tagged this question as "mortgage", so I assume the question you actually have is how that affects your mortgage eligibility? That's something you should ask your bank about.
    – Philipp
    Commented Jul 1, 2020 at 7:43
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    Additionally, if you are in fact concerned about legal consequences, you'll have to tell us where in the world you are, since, laws will vary by country/jurisdiction.
    – yoozer8
    Commented Jul 1, 2020 at 11:20

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You need to ask the mortgage company. They are offering you this mortgage as owner occupied. They will have to be willing to accept that this property you are selecting will qualify. The owner occupied mortgages don't lock you in forever, they do allow you to rent the property at some point in the future. The language in the contract should specify how long you must live in the property. They would have to accept that you are expecting to move in in X months, and be willing to risk that you never move in.

There are other things to consider. As a landlord for about 6 months you will have tax issues because it isn't your personal residence. All tax laws depend on the country, but in the United States you will have to keep track of the rent, expenses, and depreciation. You will also have to make sure the security deposit of the renter is accounted for at settlement, because they will want it back when they move at the end of the lease.

Make sure that you understand local tax laws. There are some jurisdictions that give a homestead exemption if the owner lives in the property. Make sure you don't get surprised by a bigger tax bill.

In the United States there can be a situation where a condo complex can have so many rental properties that it can be tough to get a mortgage. The lenders can't sell the mortgage because the belief that too many renters hurts the properties. You may find that you buying the property and keeping it as a rental runs into other mortgage approval rules.

As an option you can offer the tenant money to move early. You aren't evicting them. They are agreeing to move early. You probably can't make the offer until closer to settlement so they move out soon after you purchase the property.

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