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Old 03-16-2009, 12:35 PM
 
Location: michigan
19 posts, read 53,374 times
Reputation: 12

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Most banks I have communicated with over the past couple of months have stated that I will need 20%+ down payment for a 2nd home purchase.

I am pre-approved for a 200K mortgage but only have about 15K to use (maximum including closing costs).

I have worked with a couple of banks that have 0% down if I buy one of their REO's ... unfortunately what they have is not worth it (overpriced and in bad neighborhoods)

Any suggestions or referrals to banks that could write a mortgage with 10% or less as a downpayment?

I know I am asking for alot in this type of market.

Thanks for any replies in advance.
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Old 03-16-2009, 03:45 PM
 
Location: central, between Pepe's Tacos and Roberto's
2,086 posts, read 6,369,995 times
Reputation: 958
Single family or condo? If single family find a broker that is licensed in Florida (unfortunately I am not) and approved with Sierra Pacific Mortgage. They will do 90% loan to value for a second home. That is absolutely the only lender I know of that is going that high on second homes, particularly in soft markets.

EDIT: Scratch that. SPM does not lend in FL. Sorry about that.

Last edited by Daddys///M3; 03-16-2009 at 05:09 PM..
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Old 03-16-2009, 07:11 PM
 
3,576 posts, read 6,282,834 times
Reputation: 1432
Quote:
Originally Posted by successinstocks View Post
Most banks I have communicated with over the past couple of months have stated that I will need 20%+ down payment for a 2nd home purchase.

I am pre-approved for a 200K mortgage but only have about 15K to use (maximum including closing costs).

I have worked with a couple of banks that have 0% down if I buy one of their REO's ... unfortunately what they have is not worth it (overpriced and in bad neighborhoods)

Any suggestions or referrals to banks that could write a mortgage with 10% or less as a downpayment?

I know I am asking for alot in this type of market.

Thanks for any replies in advance.
Most important factor is your income. Can you carry both homes? Do you have at least 6 months of cash reserves to carry both homes?

I just closed on my second home in Heathrow, FL. I put down 20% on a mid range home (mid 500K range). I was going to put down 10% but they were charging me 5.75% and only gave me an ARM plus 7% for the second mortgage. I thought that was ridiculous considering how low the rates were.

I finally just decided to put down 20% and got a 4.875% 30 year fix.

Credit is just tight these days.

Are you in hurry to buy a second home? Will this be your primary residence? Or are you buying for investment purposes? I would not stretch your budge these days. You have to play it safe. That's what the banks are doing these days and that's why you are having a tough time getting approved for that second home.

The "buy and bail" homeowners in 2008 ruined a lot of peoples chances for a second home. Just too much fraud going on with buy and bail.

Last edited by aneftp; 03-16-2009 at 07:20 PM..
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Old 03-16-2009, 08:17 PM
 
885 posts, read 2,029,427 times
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Quote:
Originally Posted by aneftp View Post
Most important factor is your income. Can you carry both homes? Do you have at least 6 months of cash reserves to carry both homes?

I just closed on my second home in Heathrow, FL. I put down 20% on a mid range home (mid 500K range). I was going to put down 10% but they were charging me 5.75% and only gave me an ARM plus 7% for the second mortgage. I thought that was ridiculous considering how low the rates were.

I finally just decided to put down 20% and got a 4.875% 30 year fix.

Credit is just tight these days.

Are you in hurry to buy a second home? Will this be your primary residence? Or are you buying for investment purposes? I would not stretch your budge these days. You have to play it safe. That's what the banks are doing these days and that's why you are having a tough time getting approved for that second home.

The "buy and bail" homeowners in 2008 ruined a lot of peoples chances for a second home. Just too much fraud going on with buy and bail.
^What he said. It depends on your debt/income ratio. I closed on my second home up north back in January, and in the process my lender could not get me in for less than 20% down. It thought the 5.25% rate for a 30-year fixed that I got last January was excellent, but congratulations on getting less than 5% (4.875) recently! My wife's friend is looking for a first home and she's still being quoted around 5.5%.
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Old 03-16-2009, 08:22 PM
 
Location: michigan
19 posts, read 53,374 times
Reputation: 12
my wife and I have excellent credit and would be able to pay the monthly loan ... however we don't have the 20% plus closing costs. We have about 15K currently which is about 10% down on homes we have been "looking" at.

We have been preapproved by a lender down in Florida but we may have to scrap the whole idea since we don't have the 20% down.

Only options we have at this point is to borrow from family or pull equity from our primary home....which we do not want to do. We have been wise not to pull money out of our primary home in the past and now find that was a wise move since we have still have some equity left.

Looking for a single family home....and yes we have 6 months cash reserves (which is what we are using for the down payment)
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Old 03-16-2009, 11:37 PM
 
23 posts, read 93,530 times
Reputation: 21
Default Down Payment CANNOT BE RESERVES!!

Quote:
Originally Posted by successinstocks View Post
my wife and I have excellent credit and would be able to pay the monthly loan ... however we don't have the 20% plus closing costs. We have about 15K currently which is about 10% down on homes we have been "looking" at.

We have been preapproved by a lender down in Florida but we may have to scrap the whole idea since we don't have the 20% down.

Only options we have at this point is to borrow from family or pull equity from our primary home....which we do not want to do. We have been wise not to pull money out of our primary home in the past and now find that was a wise move since we have still have some equity left.

Looking for a single family home....and yes we have 6 months cash reserves (which is what we are using for the down payment)
If you are using funds for Down Payment they cannot be considered reserves; they are DOWN PAYMENT. Reserves would be considered ADDITIONAL ACCESSIBLE FUNDS in a Money Market, Bank Account or other Accounts.
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Old 03-17-2009, 08:19 AM
 
3,576 posts, read 6,282,834 times
Reputation: 1432
Quote:
Originally Posted by successinstocks View Post
my wife and I have excellent credit and would be able to pay the monthly loan ... however we don't have the 20% plus closing costs. We have about 15K currently which is about 10% down on homes we have been "looking" at.

We have been preapproved by a lender down in Florida but we may have to scrap the whole idea since we don't have the 20% down.

Only options we have at this point is to borrow from family or pull equity from our primary home....which we do not want to do. We have been wise not to pull money out of our primary home in the past and now find that was a wise move since we have still have some equity left.

Looking for a single family home....and yes we have 6 months cash reserves (which is what we are using for the down payment)
Don't be in a rush. We rented down in Lake Mary, FL for 8 months before purchasing a home.

I just loaded up in cash in the 8 months. Rents are pretty cheap in the Orlando FL area (compared to the Wash DC area where I moved from).

Unless the home is a "steal" like a great condition foreclosure, you should wait until you have enough reserves.

The other problem you are facing it the keyword, "Florida" I've talked to mortgage brokers in other states and a lot of lenders are concerned about Florida in general because it leads the nation in fraud.
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Old 03-17-2009, 07:49 PM
 
Location: michigan
19 posts, read 53,374 times
Reputation: 12
thanks for the comments.....

Pretty much from what I see/hear we will need 20% down plus closing costs. Hopefully things will loosen up a little as we recover somewhat. We should have the additional funds by the end of the year.
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