DEFINITION of 'Non-Owner Occupied'

A classification used in mortgage origination, risk-based pricing and housing statistics for one to four-unit investment properties. The property is not occupied by the owner. The term non-owner occupied is not typically used for multi-family rental properties, such as apartment buildings.

BREAKING DOWN 'Non-Owner Occupied'

A mortgage on a non-owner-occupied property might have a slightly higher interest rate than an owner-occupied mortgage, as non-owner-occupied mortgages are more likely to default. Because of the higher interest rate, some unscrupulous borrowers will try to classify a non-owner-occupied mortgage as an owner-occupied mortgage to try and save money.

RELATED TERMS
  1. Income Property

    Property bought or developed to earn income through renting, ...
  2. Occupancy Fraud

    A type of mortgage fraud, whereby the borrower lies about whether ...
  3. Second Mortgage

    A type of subordinate mortgage made while an original mortgage ...
  4. Mortgage

    A debt instrument, secured by the collateral of specified real ...
  5. Satisfaction of Mortgage

    A document generated and signed by a mortgage lender, acknowledging ...
  6. Mortgage Originator

    A mortgage originator is an institution or individual that works ...
Related Articles
  1. Investing

    3 Reasons to Invest in Multi-family Real Estate

    Here are three reasons to consider investing in multi-family real estate.
  2. Investing

    Is It Worth Buying a Second Home to Rent?

    Mortgage interest rates are low, but consider these dos and don'ts before making the leap into rental property ownership.
  3. Personal Finance

    Shopping for a Mortgage in 2017? Use This Tool First

    As home-buying technology has progressed, the process of finding the best mortgages rates for 2017 can all be done online.
  4. Investing

    5 Ways Rental Properties Jumpstart Your Finances

    Rental properties can help pay your mortgage, provide tax benefits and create retirement income.
  5. Investing

    What is Comprehensive Income?

    Comprehensive income is a part of the owners’ equity section of the balance sheet.
  6. Personal Finance

    What Is A Mortgage?

    A mortgage is a loan used to purchase a home, where the property serves as the borrower's collateral.
  7. Personal Finance

    Finding the Best Mortgage Rates in 2017

    As home-buying technology has progressed, the process of finding the best mortgages rates can all be done online. Here's how:
  8. Investing

    Today's Current Mortgage Rates: May 25, 2017

    Find the current day's mortgage rates offered by Investopedia Partners and learn more about what may impact rates in the upcoming weeks.
  9. Investing

    Who Pays Mortgage Recording Tax in NYC?

    When you buy in New York City, you even have to pay a tax to record your mortgage. Here's how much.
  10. Taxes

    Getting U.S. Tax Deductions On Foreign Real Estate

    If your home or second home is not in the United States, you can still get U.S. tax deductions. How many and what kind depends on whether you also rent it.
Trading Center