Posted on: 05th Sep, 2010 11:04 pm
Hi,
I want to buy a second home, for relocation reason, I travel 1,5 hours to work one way. My current house is appraised approximately at 108 K. I owe 57 K on it. I want to buy a second house for about 100 K. I have excellent credit. I don't have a lot of cash, so I want to know if downpayment is required, and how much? I want to rent out my first home, so the renters will cover my mortgage completely. The renting place said I can ask 1300 a month, that will leave me with 500 extra, if I find somebody for that amount. If I am borrowing from my equity, will I need to pay the downpayment , this is my question. I also thought of selling the house, however, I don't want to for such low price, I rather keep it for now. Please let me know. I am single mom.
I want to buy a second home, for relocation reason, I travel 1,5 hours to work one way. My current house is appraised approximately at 108 K. I owe 57 K on it. I want to buy a second house for about 100 K. I have excellent credit. I don't have a lot of cash, so I want to know if downpayment is required, and how much? I want to rent out my first home, so the renters will cover my mortgage completely. The renting place said I can ask 1300 a month, that will leave me with 500 extra, if I find somebody for that amount. If I am borrowing from my equity, will I need to pay the downpayment , this is my question. I also thought of selling the house, however, I don't want to for such low price, I rather keep it for now. Please let me know. I am single mom.
Hi juliasteacher,
If you want to take out a conventional loan to buy a second home, you would require a down payment of 20%. If you cannot provide the down payment, the lender will want you to go for a Private Mortgage Insurance. As you've equity in your first property, you can refinance it and use the cash out money for paying the down payment. However, as you already have a mortgage on one property, it'll be difficult for you to get another loan to buy a new property.
Thanks,
Jerry
If you want to take out a conventional loan to buy a second home, you would require a down payment of 20%. If you cannot provide the down payment, the lender will want you to go for a Private Mortgage Insurance. As you've equity in your first property, you can refinance it and use the cash out money for paying the down payment. However, as you already have a mortgage on one property, it'll be difficult for you to get another loan to buy a new property.
Thanks,
Jerry