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Buying a second home....

Scarpozzi

Scarpozzi

Lifer
I'm in no way ready to do this yet because my income level simply isn't high enough. But I'm wanting to keep my current home when I decide to move out of the area in the next year or two. Is it possible to use the equity in my current home to avoid paying hazard insurance if the equity in my current home covers 20% of the current and 20% of the future?

I'm trying to figure out how I can get a mortgage on the second home without getting bad interest rates and having to pay the hazard insurance.. 😛
 
Yeah...I bought my house and it's basically in one of the most desirable areas of town 3.5 miles from a University... I'll always have renters or business people that will be somewhat reliable...plus it has an apartment in the back, so I have potential to turn it into a make-shift duplex eventually....good income stream.


I just don't see myself living here for more than 3-5 more years. I need to leave so I can make some serious coin somewhere....thus I'll want a second house. I have too much stuff to rent.
 
I think you mean private mortgage insurance, not hazard insurance-- those are two seperate things.

To answer your question, though-- yes. If you can find a lender that will let you borrow 100% of your home's remaining equity, then you can use that as a down payment on an investment-home loan.

However, you will pay a higher rate for that second loan, as well as a higher rate on the investment loan.

Have you looked into whether you can afford all 3 mortgage payments?
 
Originally posted by: MathMan
I think you mean private mortgage insurance, not hazard insurance-- those are two seperate things.

To answer your question, though-- yes. If you can find a lender that will let you borrow 100% of your home's remaining equity, then you can use that as a down payment on an investment-home loan.

However, you will pay a higher rate for that second loan, as well as a higher rate on the investment loan.

Have you looked into whether you can afford all 3 mortgage payments?
Click to expand...
I can't yet. 😛 The future wifey is about to start Physician's Assistant school and we're going to be relocating to a different area when that happens....so it's a matter of what my income is when we land.

I don't want to borrow 100% of my home's remaining equity....just enough to keep my equity at 20% of my current home to keep my rates down. So rather than doing it in one transaction, I guess I'll have to liquidate the equity to get cash and then pay that into the second home....got it. 😉
 
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