Rates better for investment or second home?

With FHA, you can only have one FHA loan out at a time (with very few exceptions), and FHA is for Primary Residence only.. you cannot use FHA to purchase an investment home or a 2nd home.. Also, because 2nd homes and investment properties are more RISKY for the lender, they will typically require higher down payments and higher interest rates.. 10% minimum for 2nd home, and 20% for investment. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com

The only way to get a 2nd FHA loan is if you are relcating to a new community too far from where you currently live to commute, or if possibly if you can document that the current home is too small because your family has grown significantly since you purchased the home. You don't decide whether the new mortgage is for a 2nd home or investment property, that is based on where the home is located and what your intent is. If you plan to rent the home, it MUST be an investment property or you could potentially be charged with mortgate fraud. Investment properth mortgages generally require 15-20% downpayment, has higher rates and you can't use a FHA loan for them; 2nd home (a vacation property) requires 10% down.

One, you can't use FHA on investment property. Two, you will most likely not qualify for a 2nd FHA loan. FHA in most cases will only allow for one loan out at a time. You should look into a conventional loan if possible as this will give you more options. Investment will require a larger down payment than a 2nd home will. I would speak with a local loan officer and have them go over all of your choices. Best wishes, Sean