There has been a lot of confusion lately on second homes and condominiums and what down payment is required. Many agents are telling customers that if they are buying a second home condominium that they will need 25% or more down. The reality is that most lenders can still do loans with 20% down and even in many cases with 10% down. There are some restrictions, and you need to realize as an agent or purchaser, that anything less than 25% down will have a cost attached to it. Second homes that are not a condominium are also ok.

The rates for a 20% down condominium are about 1/4% higher than the best rate a lender will offer.   The 10% down option is about 1% higher in rate, but this has the PMI (Private Mortgage Insurance) built in so they have no PMI, just a higher rate. This allows it to be tax deductible. All of these are for conforming loan amounts up to a $417,000.  Anything higher is a jumbo loan and will always require 20% down.

Clear as mud???  Call or email me anytime and I’ll answer any questions that you may have.