Posted on: 03rd Dec, 2010 11:27 am
I am planning to buy a home for my daughter and her children. She can not qualify for a mortgage due to low income and poor credit. Will I be subject to more stringent underwriting and have to put more than 20% down and pay higher rates because it will be considered a second home or a rental property? I have sufficient income and excellent credit (credit score 820). Thank you.
Second home terms are same as owner occupiedas far as rate. May need at least 20% down as less than that requires Private Mortgage insurance and that is not readilty available yet. It is available with 10% down for a retail lender who uses Genworth for PMI. Not available for brokers.
However, you can purchase only as a second home if it is a vacation type home for you which usually means the home needs to be someplace where you and others vacation
Otherwise, must be investor purchase, which today for a single family home is 20% minimum down payment and rates are hihger than for owner occupied properties. Rates are higher with 20% down than they would be with 25% down.
You may be able to purchase a property with the seller holding the mortgage. Then it would be whatever down payment and rate the seller agreed to.
However, you can purchase only as a second home if it is a vacation type home for you which usually means the home needs to be someplace where you and others vacation
Otherwise, must be investor purchase, which today for a single family home is 20% minimum down payment and rates are hihger than for owner occupied properties. Rates are higher with 20% down than they would be with 25% down.
You may be able to purchase a property with the seller holding the mortgage. Then it would be whatever down payment and rate the seller agreed to.