The primary residence is the house, usually specified as a home address, which a borrower will be spending the majority of his time.

In some cases, the mailing address will serve as the primary residence of a borrower if he travels a lot. It’s still the borrower’s home even though he spends most of the time outside it instead of inside.

The gist of the question is “is this house your home?”

The reason for lenders to question whether a property is used as a primary residence by a borrower is to determine whether the given property is one of owner-occupation or for investment purposes.

Mortgages for rental property, second home, or for speculation, often come with more stringent criteria.

This is because of the perceived risks with such properties.

Because with little or no emotional attachment to it, a borrower can be less committed to repay the debt against the property.

In most cases, it will either have higher interest rates, more points, lower loan to value, etc.