Resources > Glossary > Occupancy Affidavit and Financial Status
Glossary of Notary Public, Mortgage, Signing Agent,�and Loan Signing Terms.
Function: noun
This document is similar to the Occupancy Affidavit in that it has the borrower state that they will be residing in the property as their primary address as opposed to renting it out to another party. The occupancy affidavit and financial status document also has the borrower state that there have not been any recent changes to their financial status since submitting the loan application and starting the loan process.
The Occupancy Affidavit is for the borrower to swear that they will be living in the property they are borrowing for rather than leasing the property to a third party. It is common for individuals who are investing in a second or third property to misrepresent themselves on this document by claiming to intend to reside in a particular property, as it could reduce their interest rate by roughly half a percent. Another option on the occupancy affidavit is to claim that the property is going to be a second residence which also might result in a decreased interest rate. Another possibility, is that the borrower lives in the property for one year, and then rents the property out, which might be acceptable to the lender. Lying on the occupancy affidavit is commonplace and could have consequences in the long run if the lender ever researches who is actually living in the property.
The Financial status section of the document is to verify that the borrower will have no hardship paying the first several payments. The questions on the financial status section are not probing, and do not do anything to analyze the long term stability of the borrower.
This document is one of the fairly standard documents in a loan package that are always notarized. Affidavits are almost exclusively notarized using a Jurat which requires the signer to sign before the notary in addition to taking a sworn oath. Please see the term Jurat in our Glossary for detailed information.
