OfflineI have a dilemna and I hope the DG family can help me out with this one or give me some ideas. I recently closed on a 3 family property using a FHA loan, with 2 units being rented out and I'll be living in the other one. Since then I have found a nice piece of property that I am very much interested in. It is a condo and they are willing to take 30% off the listing price, which makes it a great deal. Similar comps go for a lot more than even their listing price. So here is my question - Since I already have a mortgage with my first property and since it was purchased this year, will I still be able to use 75% of my rental income to qualify me for this second mortgage? I read somewhere that I will have to have at least 2 years of rental experience before most lenders would let you do this. If I won't be able to use my rental income, what are other possibilities?...I am not looking to borrow from a hard money lender nor do I wish to assign this property. I want to keep it and rent it (will not be cash flow positive). I am also able to put down 20-30% down on the second mortgage if that helps at all. Will the bank be more open to giving me the loan, knowing that after the down payment and the 30% mark down, there would be about 45% equity in it?
Questions about Obtaining a 2nd Loan
Posted on: Thu, 02/12/2009 - 01:45
Any taker on this one?
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I'm wondering that myself. I'll ask my mortgage broker tomorrow and post what he says. Good luck!! We're doing our first deal right now on a multi-family property with a FHA loan. We should close by March 20th.
Tracey R.
Despite some of the ads for loans, lenders are more demanding than they used to be (when you didn't have to prove that you didn't need a a loan). If the secondary financing is to be relatively temporary, you might consider using a HELOC (Home Equity Line of Credit). They used to be available to a total of 100% of value, but they are variable rate deals. Check several lenders for the best choice.
The good news is that now they are cheaper than regular 1st T.D.s and will probably stay low, since the new administration will be manipulating things to make borrowers happy. They often cost nothing to "open," and you pay interest only, and just on the amount you write a check for. A HELOC (on your personal residence) is cheaper than a LOC (on a rental) but both serve a good purpose. They make an excellent "bridge loan." A good tool to keep in your trunk, to use when needed. But is like an ARM based on the prime rate, so treat it like a credit card: very carefully.
cactusbob
I am not looking for a Heloc but rather obtaing another mortgage. There is not enough equity on my first home to get a Heloc.
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