Home Buying in 85204>Question Details

Karly, Home Buyer in 85204

Am wanting to purchase a very , very nice house for $70.000 that we want to rent out to our daughter and her

Asked by Karly, 85204 Wed Jun 3, 2009

family in the same town in IN that we live in. The first bank we went to said you can not do that . Only if we paid 20% down. ALso told us if we where purchasing a second home in another city as a vacation home that would be okay. I don't get it. We have A1 credit and bank at this bank. Is there a law saying you can not own two homes in the same city and rent one out?

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There are two types of second homes: 1. Investment, 2. Vacation. You are descripting an investment house. A second home would be property you pruchased for example in Flagstaff. Investment houses require a greater downpayment in insure the buyer has equity in the property.
0 votes Thank Flag Link Mon Sep 17, 2012
There used to be (prior to the great recession) a loan program called FHA kiddie condo. It allowed for exactly what you are talking about. Another option would be to have your daughter on the loan, then you're just a cosigner.
0 votes Thank Flag Link Mon Sep 17, 2012
The lender is probably classifying the second home as an investment property. Investment properties are considered higher risk. As such, a higher down payment is required along with higher interest rates. No law against it if you can afford the higher down payment and rates.
0 votes Thank Flag Link Wed Jun 3, 2009
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