Home Buying in Washington>Question Details

Speechless35, Home Buyer in Washington

Can you buy a vacation property in another state as a first time home buyer? We live in WA but want to buy a vacation home in AZ--we currently rent.

Asked by Speechless35, Washington Sun Oct 23, 2011

I would be financing the loan myself, have been employed for more than 2 years at the same job and make about 40K a year. I have a good credit score (middle 700s) and rent. I get a stipend from work for rent so my actual out of pocket expense for rent each month is $360. I am considering homes between 90-120k but am not sure if I can qualify for that.

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As a loan officer, I can tell you that you want to get in touch with a lender in AZ. This would be called a 2nd home, which would give you the best interest rates. If you need a referral to one there, let me know.
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1 vote Thank Flag Link Sun Oct 23, 2011
Can you buy a vacation cottage in Florida as a secondary home? We live in Illinois we are making mortgage payments here as a primary residence. Please advice, thank you.
0 votes Thank Flag Link Mon Nov 19, 2012
You should ask this as a new question in your area to get the best, most up to date answer. Buying a second home is not an issue, if you qualify based on credit, income and assets.
Flag Mon Nov 19, 2012
2nd homes just require a 10% down payment, but with that little down you'll need a 660 score if you can find a home you like at http://www.homepath.com and use Fannie Mae HomePath financing, or a 720 score if you want to use non-HomePath financing. With 20% down just a 620 score would be needed, since you said your score is 700's and not 720+'s.

If the stipend from work has been received for the past 2 years and is expected to continue, the details would need to be reviewed, but those are normally the requirements for extra income like that to be able to qualify. It is treated as extra income rather than offsetting your rental expenses (i.e. your income goes from $3,333/mo to $4k/mo, etc.).

Keep in mind that some lenders do not permit a first time homebuyer (someone who hasn't owned a home in the past 3 years) to purchase a 2nd home or investment property, so if that is you then it'd be an important question to ask upfront (don't expect lenders to volunteer that information, it may not be "caught" until further along in the process).

If you could qualify for a $90-120k home with 10%+ down & $40k of income would still depend on: your stipend amount, what you pay in rent, and how much your other consumer debt payments are (car, credit cards, student loans, etc.). You'll want to keep the total payments, including the new mortgage, to no more than about 41% of your gross monthly income.

If you need assistance figuring out a plan early next year I'd be happy to help.
0 votes Thank Flag Link Mon Oct 24, 2011
Right now, I can do 10% down without taking any money out of primary savings. However, I plan to start looking in February or March. I might be able to do 15% down at that point comfortably. I just don't want to take anything out of primary savings.
0 votes Thank Flag Link Sun Oct 23, 2011
You didn't mention down payment. I believe with enough down payment this wouldn't be an issue. It will depend in large part how the lender qualifies you. This will not be your Primary Residence, so you'll need to qualify as either a vacation home or investment property.
Your only reliable answer will come when you sit down with a lender who can do multistate loans or an AZ lender. It can't hurt to investigate further, best of luck.
0 votes Thank Flag Link Sun Oct 23, 2011
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