Financing in Ocean Pines>Question Details

Rye27, Home Buyer in Ocean Pines, MD

Can I purchase a house in ocean pines for $230,000 but apply for a $330,000 loan (with $100,000 down). This way I can pay off my current mortgage and

Asked by Rye27, Ocean Pines, MD Wed Feb 1, 2012

save on the monthly PMI? currently have saved almost $100,000 for a new home but I do not want to carry two mortgages. If I pay off my current home I will not have the money for the 20% down. My question is... if I buy a home in ocean pines for $230,000. could I get a loan for that property for $330,000 from the mortgage company then put $100,000 down. This way I can pay off my other mortgage and save on the PMI.

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No, that won't work. You need to put 20% for most conventional mortgages and the real issue is the appraisal. A home priced at $220,000 will not appraise for $100,000 more. Also, there are mortgages available with less than 20% down. I am an Ocean PInes agent, so let me know if I can assist you. You may want to talk to a local lender for more options.
0 votes Thank Flag Link Tue Feb 7, 2012
No.

It doesn't work that way.

The new mortgage would only cover a percentage of the appraised value of the new property.

What you're talking about, perhaps, is called a blanket mortgage--a mortgage that covers two or more properties.

However, I'm not sure you'd see any savings from your plan. Your way, you'd have one huge mortgage on the new property and a paid-off second property. In the conventional way, you'd have two mortgages adding up to the same amount.

Recognize that you may not have to put 20% down on the new home. With FHA, for instance, you'd only have to put 3.5% down. And there probably are programs that would allow you to put, say, 10% or 15% down. That, in turn would reduce your required downpayment, while giving you more money to pay off the mortgage on your current home.

Check with a Realtor or lender for more information (and possibly other strategies to help you accomplish your goal).

Hope that helps.
0 votes Thank Flag Link Wed Feb 1, 2012
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
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