Investment property vs. 2nd home purchase

You dont charge rent on a 2nd home first of all. That would be an investment. Your 2nd home would usually need to be 50 miles from your primary residence. If you are buying in th same city that you live in that would be an investment. A second home is used for vacation or work usually. The rates on 2nd homes are much better than investment rates and the difference depends on how much money you put down for the purchase and fico score.Call me if you have a specific scenario. 949-355-4715 Ted

There is a big difference in pricing on a second home vs investment (rental). If this is a home that your daughter (or any family member) is going to live in, I would consider the second home. There are some "gotchas" that you need to be careful about. Most second home documents prohibit you from renting out the property, ever. This could pose a problem after your daughter graduates. It also could pose a problem is she wanted to take in roommates for rent. Distance from your primary residence may also be a factor. If the second home is across town, but more convenient than traveling home each day, that probably won't fly, because a second home needs to be in a different community, like a vacation home. There are programs out there that may fit the bill. Contact a local Mortgage Banker/Broker, rather than one of the big banks. Unlike a bank employee, who is most likely just an order taker, a Mortgage Broker/Banker is Trained, Tested and Licensed in all aspects of Mortgage Origination. He/She will have access to loan products of many lenders, not just those of one bank, and can properly guide you. But more importantly, He/She is trained to take a look at the various different options available to you and guide you into the one that makes the best sense for your situation. Don't forget to check out your selected Mortgage Originator at the National Mortgage Licensing System at www.NMLSConsumerAccess.org ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ www.LoansA2z.com

There are 2 primary differences between a 2nd home and an investment property from a loan standpoint. First, lenders won't loan on a 2nd home purchase without at least a 30% down payment. Second, there is a 1.75% cost adjustment to the loan, which, if the condo is $300,000, amounts to $5,250 additional cost for the loan. This is a Fanni/Freddie guideline adjustment and all lenders abide by it if they want to have a chance to sell their loans to Fannie or Freddie. If your new home is far enough away from your primary residence, which I believe is 50 miles, then it can be considered a 2nd home as long as you don't charge rent. Of course, if it's a 2nd home you will be responsible for the payments and they will cause your debt-to-income ratio to increase quite dramatically, possibly resulting in you not being able to qualify for the loan depending upon your financial situation. On the other hand, if you rent the condo to your daughter, it will be considered an investment property subject to the sizeable down payment and cost adjustment explained above. Then you will have to show the rental income on your tax return which will be used to offset the monthly payment, making it easier for you to qualify for the loan. Unfortunately, you can't have it both ways--legally. If you try to show it as a 2nd home and have your daughter make the payments without showing them as income, not only will you put yourself in jeopardy with the lender if it finds out you purchased the home for investment purposes, but also with the IRS. Not a good idea. Give me a call 16/7, or email me, and I'll be happy to discuss the alternatives with you. To learn more about me and our mortgage brokerage, click on my picture. When the next page pops up, click on "Website" and you will be redirected to ours. We work exclusively in CA and get loans done fast, typically in less than 30 days, at low interest rates and costs. Representing 39 quality lenders that offer more than 1,000 loan programs, we definitely have something for everybody.

I can do this loan at 2nd home rates if she is in college and living at school. Is this the case, or no? Please make sure that you speak with an experienced lender who will lay out various options and intelligently discuss the pros and cons of each with you. Your pre-approval should reflect in writing that all financial documents have been reviewed. This will make for less stress and potential issues during the process as well as make it more likely for a seller to accept your offer on the home you want. I'm happy to help with the financing or just give you advice. If you need more information, or a competing rate quote call, email or use my live support button to discuss or get in touch with me. Web Address for live chat or quote is: http://www.loansfromrob.com/quote/ Email is robertlh66@verizon.net and direct phone is 240-752-7549. Good Luck -- Rob Hanson

Investment properties and 2 nd homes can be a little bit of a blur, that being said. Investment properties require 20% down vs a second home can be looked at as miles away from your current owner occupied home. This may be lender specif as each lender will look at this a little different. Jesse Stroup Mortgage Professional | Mortgage ManTwitter: @jessestroup

investment property is 20% down payment opposed to second homes which are 10$% down payment requirement the adjustment to the pricing on the investment property is 1.75% which will affect your rate your better off buying a second home if you can and it works.

Is your daughter going to school where you are buying the condo?Even if you do as an investment property you dont have to charge rent. There are a couple ways we could work this out. Just contact me with any questions call or text 702.764.3511

if you plan to use a loan - the pricing is similar ...you might consider havcing her on the loan with you and if this can be done - you might be able to get owner occupied pricing on a loan - good luck -Dave Skow | Loan Officer Movement Mortgage NMLS 278613 Dave.skow@movement.com Mobile (206) 714-9745