Financing in Braintree>Question Details

Karen, Home Buyer in Braintree, MA

How do I purchase a second home with my boyfriend. My mother would live in my current home.

Asked by Karen, Braintree, MA Tue May 20, 2008

How can I finance the second home? Is a home equity loan allowable as the down payment? My mother will be living in my first home rent free.

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Answers

5
You should also consider the possible tax issues regarding your mom living in your home rent free. You'll probably need to consult a tax professional as well as a real estate attorney.
0 votes Thank Flag Link Tue Oct 21, 2008
Karen-
You can buy a 2nd home with no problem as long as your debt to income is going to stay within in the guidelines, normally 50% max on a conventional loan. One thing I would caution on is the rental agreement with you mom. You dont want to put a rental dollar amount into a contract for the lender, that would be fraud, in order to get you debt to income in line. Watch your lender, or broker when it comes to this, if your debt to income is close, they may ask you for a lease signed by your mom to qualify.
Web Reference: http://www.MortgageEtc.info
0 votes Thank Flag Link Sat Oct 18, 2008
I believe that you would have to have a lease agreement with your mother. I'm not sure if the lease would have to show a monetary value since you don't seem to need the income for your new purchase. My suggestion is that you contact a professional, full-time loan officer that can help you through understanding different loan options available to you. Best of luck and congratulations on purchasing a new home with your boyfriend.

If you are not currently working with a Buyer Agent and you are looking to work with a full-time real estate agent for your personal representation, please feel free to contact me.
0 votes Thank Flag Link Fri Oct 17, 2008
It all depends. Do you qualify for both payments. Normally you would have to show the previous home as a rental but if you can afford the new home and the equity loan then you should be fine.
0 votes Thank Flag Link Tue May 20, 2008
You will need a lease to show you mother occupying your current home. A heloc is an acceptable down payment source. It will be counted in your debt to income ratio however. I would get prequalified before you make your next move.
Web Reference: http://getprequalified.com
0 votes Thank Flag Link Tue May 20, 2008
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