Profile picture for CHULIES

BUYING A SECOND HOME RENTING THE FIRST.

IS IT POSSIBLE TO BUY A SECOND HOME WHICH IS VALUED AT A LESSER PRICE THAN WHAT MY FIRST ONE IS. CREDIT NOT A PROBLEM AMD MONEY IS NOT EIGHTER . I JUST NEED THE RIGHT BROKER TO HELP ME. (SO I THINK)
PLEASE ADVISE IS THIS POSSIBLE.
THE PRIMARY HOME I WOULD LIKE TO RENT OUT (NOT SELL)

BLOOMINGTON CA
  • June 05 2009 - Bloomington
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Answers (6)

Your biggest problem will not be that the home you are buying is valued less than the one you are leaving, your biggest problem will be that you will be required to qualify for both payments without benefit of rental income if you don't have 30% equity in the property you are vacating. Going from a more expensive property to a less expensive one can be overcome with explanations, the 30% equity cannot.
  • June 05 2009
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Many lenders will not fund mortgages for second homes that are within a certain radius of your primary residence.  I guess they feel that nobody would buy another "home" that close to their primary residence, and any purchase that close would more likely be an investment.

P.S. Consult your lender, broker or advisor on specific underwriting guidelines for your situation.  If you don't ask, you won't know. :-)
  • June 05 2009
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Profile picture for wetdawgs
What does 30 miles have to do with anything?
  • June 05 2009
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Profile picture for wooties
Yeah dude, it's called a conventional loan. I suggest you consult a lender rather than a broker though.

PS: CAPS LOCK is just cruise control for cool. ...
  • June 05 2009
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This has not been an issue in the past, especially if your primary home is valued more than the second.  Also, you want to make sure that the second home is at least 30 miles from your primary.

Renting your primary home is really your business and decision, however, your lender may have an issue with it when financing your second home.  I would ask your mortgage broker about that.

Marco Santarelli
Norada Real Estate Investments
.
  • June 05 2009
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Profile picture for Brian1f1
If money and credit aren't an issue, then no problem. Just check your current mortgage to make sure you are able to rent.
  • June 05 2009
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