Prefer to talk in person? Find a mortgage specialist on Zillow
Profile picture for lkool

Down payment requirements for second home

we are underwater on our current home.  We would like to purchase a new home and keep the old home for rental,  we know we can't use the rental income to help qualify for the new purchase. 
Keeping the old home and adding the new mortgage payment our Debt to income will be between 25 - 30%.  Credit is somewhere between 685-715.  I have been told that I would need at least 20% down for the new house.  Is this accurate?  Without equity in the old house,  that is a difficult number to attain.
  • September 04 2012 - Minneapolis
  • 0
    0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

Answers (2)

lkool,

If you are going to rent your current primary residence why not apply for the new house as a primary?  You might qualify for FHA financing with 3.5% down payment.  And even if you identify the new house as a second home you can still purchase the house with 5% down as long as your debt to income ratio is acceptable (below 45 typically) for conventional financing.
Good luck!
  • September 05 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I have to say that it's all about your relationship with your banker, and the amount of your down payment. We were able to buy a third house this year with 20% down. The bank told us we could buy a fourth and they would finance it too.
  • September 05 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.