|Posted by: Tim Aug 19 2004, 11:22 AM
|I am working with a friend who owns a campground, on the property is a lodge where they live. They are working with a mortgage company who is giving them advice to get a residential loan on the entire property. Is this legal?, Ethical, Smart?
|Posted by: loanuniverse Aug 19 2004, 05:43 PM
|A residential loan is one of the cheapest ways to obtain long-term financing.
The mortgage company is giving them this kind of advice because that is what they do, they do mortgages. I am not completely familiar of the requirements for those types of loans, but it would seem to me that since the property is being used as a primary residence, at the very least an argument could be made for a residential loan.
The one thing that I would avoid is to lie in an application.
If there is a question about any part of the property being used for a business, I would answer truthfully. Tell your friend not to lie on any portion of their application, and he should be ok. Doing otherwise is not only unethical, it is fraud.