Hi There Homeowner,
Are you thinking of upgrading from starter home to dream home? Or perhaps you’re simply looking to purchase a second home as an investment. Either way, I applaud you! Real estate is still one of the safest investments one can make. It’s like Mark Twain said, “buy land. They’re not making more of it.”
Here are 4 questions I hear often from folks preparing to make a second purchase.
Q: Can I keep my current home and rent it?
A: Lender on your 2nd purchase will want to see that rents you are collecting on current home will be 25% higher than the mortgage.
Q: How much down payment do I need if I am no longer a first time buyer?
A: You can finance multiple homes with as little as 5% down once every 12 months up to 10 homes. ***As long as your DTI ratios are in line.
Q: Can I take cash out from my current home for my down payment?
A: If you have the income to purchase that 2nd property, but your down payment is tied up in the equity of your current home, you have 3 options to access it: 1) Home equity line of credit 2) Cash out refinance 3) Sell the first home. ***This will depend on DTIs and many other factors. DM for more details or consult with your trusted professional.
Q: How do I calculate payment on mortgage for the second purchase?
A: Online calculators! Click here to access free mortgage calculator. Simply enter price of the 2nd home plus the down payment you want to invest. It can be as little as 5%.