Reply to Removing a second home rider from mortgage

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Reply to "Removing a second home rider from mortgage - how does it works?"

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[quote=Anonymous]I am in a similar situation;  My broker knew from the very beginning that I was buying the house as an investment property yet when it came time to close the "second home rider" appeared.  We were on our second extension and I knew the seller would pull the plug if we didn't close on time.  I believe the brokers use bait and switch tactics to make their loans appear competitive to a real investment mortgage which should have a slightly higher interest rate and larger down payment.  For example, a second home mortgage with an interst rate of 4% with 20% down would be comparable to an investment loan with a 5% interst rate and a 30% down. When you compare rates, the legitimate lender is trying to get you into the 5% 30 down loan because he knows your intentions.  On the other hand, the shady lender might promise you 4.5% with 20% down and not tell you he/she is putting you into a second home mortgage until you're ready to close.  In the end, the "deal" you thought you were getting turns out to be .5% higher rate and the second home rider restrictions. :? :?:[/quote]

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