Question Details

Sam, Home Seller in Michigan

Is 95% LTV available for secondary home? What would be the best option to go with - HELOC or FHA loan?

Asked by Sam, Michigan Thu Oct 9, 2008

or Interest only (ARM - 3 or 5 years) Currently no mortgage on this secondary home and is not investment, is currently on sale or rent to own!

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Chances are you will not be able to get a 95% LTV on a disclosed second home. You may try and find a mortgage company who can do it for you if you have oerfect credit. FHA is for primary residences, you can not use it for 2nd homes. Your best bet is to contact a local and trusted mortgage broker and let him tell you what is available to you, stay away from the internet lenders. good luck in your search.
Web Reference: http://www.ScottSellsNH.com
1 vote Thank Flag Link Thu Oct 9, 2008
Hi, you have a few things to look at here. You say that this home is owned free and clear, no mortgage. You cannot "cash out" to 95% with any loan (FHA allows, but only primary residence) Cash out loans also have some restrictions as to how much cash you can get back.Also, it appears that the house is listed for sale, you cannot lend on a home that is listed for sale. It may have been possible to get a heloc on the home, but your listing it has negated that. There are "seasoning" requirements that are strict in lending regarding houses that have been recently listed for sale. I would recommend you take it off listing and simply rent it in this market as values are still declining. It is ok to rent a second home, you cannot use income from a second home to qualify for a mortgage however. I recommend that you speak with a local mortgage broker. Online and internet is only going to cause you pain for nothing. Mortgage pro 15 years.
0 votes Thank Flag Link Fri Oct 10, 2008
Yes, you can get a 95% LTV loan for a second home if the home is not deemed to be in a "declining market". As the first responder said, you cannot use FHA loans for second homes. You would need a conventional loan. National Bank Of Kansas City, a federally chartered bank, is one of the top national lenders in the country. I would be happy to answer your questions. Feel free to call or email me. Check out the website below.

Don't let the caution against "internet lenders" frighten you. I would prefer the term "national lenders" because we simply offer home loans in all 50 states. We use the same technology as a local lender: phone, fax, email. We operate on higher volumes of loans, so we can offer better terms. I used to work for a broker that only dealt in the "local market" of Kansas City, and I couldn't compete with the low rates and costs of the "internet lenders" so I went to work for one!

John Brown
Loan Consultant
(800)375-8096 ext 0147
0 votes Thank Flag Link Thu Oct 9, 2008
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