Hypothetically speaking, say I found a house to buy but I already own one

McCracken

McCracken

Logan Can't See This
Joined
Jul 9, 2005
Location
With your mom at a nice seafood dinner
Long story short there's an opportunity for the family to get a little closer to the old homestead. This is where the Jeep lives, all my wood for winter is cut and split, my farming endeavor is and my new Willys project is at. Now I already live in a house but I'd like this one. I am not a bo-jillionaire or Jody Treadway and I'm not fond of two house payments. However, it's my understanding that when trying to get a loan for a second home the interest rates are high. Maybe not giraffe's ass high but close. Has anyone been in this predicament? Is there an option beyond that maybe I'm missing that doesn't include putting mine on the market and hoping it sells prior to the other place being sold?
 
It still involves putting yours on the market but if it were me I'd start by seeing if they would take a contingency offer on the one you want before looking at a bridge loan or 2nd house loan.
 
When we were purchasing an, ahem, vacation home in Raleigh to go with our home in Candler, it was all about credit, savings and debt to income.
We had no issue getting a second loan (we weren't and ain't ballers) as long as our finances were in order. This was in 2012 so getting any home loan, especially a second one, wasn't a walk in the park.
One phrase I kept hearing that we needed to repeat was that we were purchasing a vacation home, not a second residence.
 
Contingency offer. When we bought our current home, we made the offer as a contingent offer. It was contingent on our home selling. We actually had to delay closing on the new home for a couple weeks because the home we were selling had not closed yet.
 
I own 2 houses, name is on both. One house is a permanent residence, second house is a rental home. I HAD to say rental/vacation home in order to get another home loan. It's just verbage, but I still have 2 house payments.
 
If it is a private sale you can ask the seller to hold the note for you and make payments to him till your place is sold, then go to the bank for the remainder. Personally I would move further away from extended family! !! But that's just me! My wife says it's "the California in me" what ever!! I don't need to see my in laws EVERY FAWKNG DAY!!!!!!
 
Loganwayne said:
House on the hill?
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No but close. That's where I want to get closer to.

Jody Treadway said:
When we were purchasing an, ahem, vacation home in Raleigh to go with our home in Candler, it was all about credit, savings and debt to income.
We had no issue getting a second loan (we weren't and ain't ballers) as long as our finances were in order. This was in 2012 so getting any home loan, especially a second one, wasn't a walk in the park.
One phrase I kept hearing that we needed to repeat was that we were purchasing a vacation home, not a second residence.
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you can't fool me Mr. Treadway. I seen you wearing them diamond rangs where erbody knows.

A gen a work told me that we could explain it to the bank that it will be our primary residence and that we were moving there immediately. He claims they gave him the lower interest rate. I hear you on the contingency offer. These are family friends so that may work.
 
We just did this. Bought a new place, didn't sell the old one. It comes down to how much you're putting down, how much you make, what the payments will be, what your credit is, etc. We got market rate for interest. If you have a pending sale or lease on the first house, the bank is more generous with what they'll loan for the second.

I recall a discussion about how the new house "had to" be our primary residence. If we said it was for investment, vacation, etc, that was no good. Based on the discussion above, I'm guessing it would have bumped the interest rate.
 
frankenyoter said:
Get a contract to rent your current home and a loan will be easy. A friend did this about a year ago, I still don't know how he could swing it. It was through SECU.
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Mine was also through SECU
 
As stated, interest rates will be higher but most banks are also pretty stringent on having a fairly sizable down payment on the second home to keep the debt ratio lower.

I am thinking of going down this route as well, but to purchase a piece of property to rent out.
 
You can have up to 4 conventional conforming mortgages with prime rates.
You can actually have up to 10 but 5-10 have some different requirements.

I am somewhere below the Jody Treadway and benevolent board dictator family financial status and I have 5 mortgages currently with the highest fixed interest rate being below 4.25%.

The deal is if you plan to rent it out, you can count the rental income to offset the payment if you have a contract in place. IOW a good rental will actually improve your debt to income ratio. Now maybe you dont plan on renting your current place. But you could, and then if things fell through and you had to stay there until the second place was ready, well thats too bad isnt it.

Not sure about NC but in SC property taxes double on non primary residences. Keep that in mind.

Honestly it all comes down to credit score, income and what bank you are using.
Stay away from the big banks.
If you have a South State bank near you they LOVE real estate loans.
 
Not familiar with South State but one other thing I heard was that the insurance companies will not allow you to have 2 HO policies at the same time. One is either the home owner's policy and the other is a fire policy. The same guy told me that the fire policy was much more expensive.
 
The insurance is going to be more expensive. No matter if you claim it as a rental or vacation. We ran into that when the family was left the house I'm living in
 
If its a rental you only have structural insurance not content insurance.

There are ways around the 1 primary residence rule though...
 
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