Second home mortgage with a rented out first home

You should purchase your next home as owner occupied. By refinancing your rental, you will have to pay investor rates, which are typically higher. Lower rates are offered to Owner Occupants. Get with a local mortgage broker, not a bank, and have him take a close look at your scenario. He will be able to explain the differences and show what you can expect. WilliamAcres.com

Williams response is mostly on-point. However, you may want to look at other financial benefits of refinancing it if the interest rate for a new investment mortgage is lower than the rate you have on the current mortgage.I am not quite certain why he would suggest a local mortgage broker and not a bank. Look for a reputable company and select an experienced mortgage professional. The only suggestion I have is to avoid inexperienced originators in call centers.

If you are truly buying a second home (aka vacation home), you can buy that home with as little as 10% down payment depending on the county and state the subject property is located subject to mortgage insurance acceptability. If this is for the purpose of buying a home in your local market to live in as a primary residence, you will need to qualify with the existing mortgage in your qualifying ratios.