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Profile picture for SecondHome1

Want to buy 2nd home, but concerned about qualifying&rates.Have great FICO score. Any advice?

We have great credit, some debt. Want to know what we have to do to qualify, especially in this economy. Would mortgate interest be deductible? And any recommended lenders to work with?
  • March 11 2009 - US
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Answers (5)

Profile picture for dgroulx
I just heard back from my broker.  For an FHA loan I will need 25% down, for a conventional loan 30% down.   So, I will continue to rent.  
  • March 12 2009
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A second home will require a down payment of 20% as PMI is unavailable on second homes.  The rate should be the same as an owner occupied loan.  If you can afford both payments the equity requirement of your primary home is not a issue.  The equity requirement is for those wishing to convert their current home to a rental and buy a new primary.  Post your request on Zillow and you should have several lenders to choose from.
  • March 11 2009
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Profile picture for dgroulx
I am also looking to purchase a second home, as I work in another city and rent an apartment there.  I have excellent credit, down payment cash available, no credit card debt and a six figure income.
I was told by a mortgage broker that because I do not have at least 25% equity in my existing home, that no lender will give me a mortgage.  It's been over a week and they are still shopping me around but it doesn't look good.  My house is now worth $100,000 less than what I owe on it.  If you still have any equity left in your existing home then you should be okay.

All interest and taxes are deductible for a 2nd home, which is why I want to buy instead of continuing to throw my money away on rent.
  • March 11 2009
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A second home requires 10% downpayment, an investment or rental property requires 25% down. Either one has tax implications you tax adviser should inform you of. Generally interest can be deductible.
  • March 11 2009
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you really shouldn't have a problem qualifying.  i don't know what state you are in but a second is priced pretty close to a primary residence.  i priced one at 5.25% recently.  depends too on your down payment.
hope that helps somewhat.  
  • March 11 2009
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