Buying a second home without selling the first

[Anonymous]

18:42- you should look into refing. Those rates are high in today's market.

[Anonymous]

We did this last year. Bought a SFH, moved, sold out duplex in Del Ray, all before we had a month of double mortgage payments. It was stressful, but worked out great for us.

[Anonymous]

We did it a bit differently. The mortgage on our first house was a 15-year so the monthly payments were high even though the balance of the loan was fairly low ($100K). That hurt us a bit because the house we were buying was pricey and between the two our monthly debt to income ratio was fairly high. So what we did was took out an interest-only home equity loan for $250K paying off the first mortgage with it. That lowered our monthly debt to income ratio by A LOT. Our monthly obligation on our first house was now only $800 versus $2300. Because of that we were able to qualify for the mortgage on our new home. It took some maneuvering and cost us some money, but it worked out for us.

[Anonymous]

Anonymous wrote:We bought our second house without selling the first. We had to have our first mortgage calculated into the equation of debt to income ratio, but otherwise it all worked out fine. First house was a conventional loan, second house was as well. We put down 10% on second house in cash AND paid up-front PMI (make sure you understand how the laws changed around PMI in 2013; it's ridiculous how some people have no clue that PMI payments are for the life of the loan in many cases now).

We do have a tenant in the first house now, but the bank didn't need any of that detail because it wasn't factoring in.

How is PMI for the life of the loan? Eventually you reach 78% ltv and it gets removed, assuming you make your payments as agreed.

[Anonymous]

Anonymous wrote:

Anonymous wrote:We bought our second house without selling the first. We had to have our first mortgage calculated into the equation of debt to income ratio, but otherwise it all worked out fine. First house was a conventional loan, second house was as well. We put down 10% on second house in cash AND paid up-front PMI (make sure you understand how the laws changed around PMI in 2013; it's ridiculous how some people have no clue that PMI payments are for the life of the loan in many cases now).

We do have a tenant in the first house now, but the bank didn't need any of that detail because it wasn't factoring in.

How is PMI for the life of the loan? Eventually you reach 78% ltv and it gets removed, assuming you make your payments as agreed.

Not for FHA loans - PMI stays until you refi.

[Anonymous]

The laws changed on FHA loans. You should definitely do your homework. You will owe for the lifetime of the loan if you do not put down 20% at closing, although yes the loophole could be a refi at the right time.

[Anonymous]

Only FHA loans have lifetime PMI (unless refi). However, if this is a second home then FHA is probably not the loan they would be considering. We are in the process of buying a second home and we will rent out the first. We had to qualify to carry both loans and just had to write a letter to indicate our intentions for our first home.

[Anonymous]

We did this. Our mortgage co would not consider rental income without an established history but felt we could afford both. If you want to refinance current house, do so while you live there, the rates are higher for rentals.