if i'm going to buy a townhome to rent out do i need a different loan for that?

You need to purchase it as a investment loan, if you are not selling your home that you are in. You will need a down payment of approx 20% linda

A second mortgage is what you get when you are trying to take cash out of your existing home's equity without touching the first mortgage. If you are looking for a mortgage to purchase a rental property, then you would apply for a new first mortgage. You would then pay the difference between the purchase price and the loan amount as your down payment. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ Licensed in Arizona (AZLO0911876 / AZBK0902429), Washington (WALO40586 / WACL3087) and California (CADOC40586 / CAFLL6036566). We are licensed by the CA-DBO under the CFLL and CRMLA. Loans made or arranged pursuant to CFLL or CRMLA license. ~ www.LoansA2z.com ~ 888-889-9950

You can refinance your current home, if that will give you enough to pay cash for the rental. Otherwise, you will need a purchase investment loan on the townhome, with 20% or more down.

Investment properties require a minimum of 20% downpayment - expect the rate to be higher as well, how much depends a lot on your credit score but a larger downpayment can drop the rate significantly as well. The 20% downpayment can come from a variety of sources (including refinance of your current home or a home equity loan/HELOC) but there is no way around it - and you'll likely need reserves as well in order to be approved.

If you have the funds available you will just get a non-owner occupied loan with a 20% down payment. If possible I suggest to put down 25% since you will receive better terms. If you need to use the equity in your current property for the down payment you can look at doing a cash out refinance or doing a 2nd mortgage/HELOC to get the cash available. Speak with a local loan officer and have them present you all of your options so you can make the best decision. Best wishes, Sean