[tbill618]

Thinking of buying a second home for family in Henderson. We own free and clear in Boulder City. I have two questions,

1) I was told because we already have a home that we would need to put down 25% on the second house. Anybody have this come up and did they get away with paying less than 25%?

2) We are looking at some homes that might need repairs. How difficult is it to get a construction loan nowadays? Maybe up to $100k.

[WestieJeff]

1) A close friend bought a 2nd home, specifically as "I'm going to rent out our current house and buy a new primary residence". To do that you need to be moving up to a bigger house though. They put 10% down on a conventional loan.

2) I'm assuming you'll want to get a loan higher than the current unrepaired value of the home, which you would improve and then raise the value to the new loan amount (or higher). This would be tricky to do and your best bet would be a FHA 203(k), it's designed for exactly what you want to do, however with 100k amounts you'll need to hire a general contractor (no DIY) and there are definitely additional costs/fees going with that type of loan (additional loan fees, extra appraisal costs, construction work inspection fees, etc.)

If you have a current home free and clear, can you just cash out refi your existing home and pay cash for a new house?

Originally Posted by tbill618

Thinking of buying a second home for family in Henderson. We own free and clear in Boulder City. I have two questions,

1) I was told because we already have a home that we would need to put down 25% on the second house. Anybody have this come up and did they get away with paying less than 25%?

2) We are looking at some homes that might need repairs. How difficult is it to get a construction loan nowadays? Maybe up to $100k.

[tbill618]

If you have a current home free and clear, can you just cash out refi your existing home and pay cash for a new house?

That is a good idea. Much less hassle. I am ashamed I hadn't thought of that earlier.

As for the FHA loan I will look into that and see if we qualify.

Thank you very much.

[Willy702]

FHA loans are 3.5% down as long as they are owner occupied. Just make it your primary residence for a year or two and you should have no problems. The loans are easy to get as long as you have verifiable income.