Prefer to talk in person? Find a mortgage specialist on Zillow
Profile picture for user005254

Wanting a vacation home!

What is a good DTI ratio for a vacation home?  We would be at 38% with the new home, but is that too high to qualify for a 2nd home mortgage?  Also, if we only put down 20%, how would we know what the PMI would be, since that will likely increase our DTI?
  • March 06 2012 - Avalon
  • 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 (5)

Lots of vacation property type markets in the price range your looking are likely markets to which have had significant valuation damage over the years.  You'll always find distressed homeowners here AND sellers having a difficult time getting a vacant property sold.  Consider interviewing an agent that understands creative financing so stop sitting on the sidelines waiting for the bank to give you an approval.  An All Inclusive Trust Deed is a good way to go, Seller Financing, even Lease Options are great ways to get into homes.  But be sure your agent knows what they are doing, get legal advice (if doing an AITD), and be sure it's a win/win deal for both you and the Sellers!  Best of luck!!
  • March 06 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.

Put a principal and interest payment of $1797 in place of the P & I payment you have built into your 38% debt ratio, ( add taxes and insurance too) what ratio do you get now?  
  • March 06 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.

It's a great time to make an investment. Try checking out a Realtor in the professional section above for the best deals out there.Since they live in your area, they know it better than anyone else.  They can get you everything you need to find a great vacation home.
  • March 06 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.

Profile picture for user005254
I'm sorry, I meant to type 10% down, not 20.  We currently have 10% saved, but are wondering if we should focus on saving 20% to avoid PMI?  Our credit scores are both between (710-730).  It would take us about 8 months to save the additional 10% on a $400,000 home. 
  • March 06 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.

There is no PMI if you put 20% down.   38% debt ratio should be no problem for second home purchase if all other factors are suitable.
  • March 06 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.