In a slightly different vein... vacation rentals can be a lot of expense and hassle. Also, the market for them is pretty low right now with hotel rates dropping so low. If you can afford two mortgages you may be better off renting a nice room occasionally when you want to get away (or rent someone elses vacation home,) and put your money into a pure real estate investment which is focused purely on the bottom line.
Please feel free to contact me if you'd like to discuss strong investment real estate opportunities here in L.A. and Best of Luck.
If they had a home you were interested in it might help you get in with less down. You will still need to decide if it is going to be a rental or vacation home for tax purposes as mentioned by others.
I just sat down and had a chat with my lender on your behalf. I read him your question, and here is the up-to-the-minute information.
If the loan amount (not purchase price) is less than $417,000, you can purchase with 20% down, but no less than that. The rates and terms will be similar to those of a single family owner occupied: very low 5.x%, and perhaps 1 point. If you put a relative in the property, (buy it "for" the relative) the lender will still perceive it as an investment, and not as a second home. The only difference to you is that, as a non owner occupied non second home, the points will jump up to 1.75, but the interest rate will be largely unaffected.
Suppose your loan amount is over $417,000? You will immediately need 35% down, regardless of who "occupies" the property. Jumbo conforming is $729750.
Want more information? I'd love to be you go-to girl. Hope this helps.
Best of luck,
Certified Short Sale Professional
Certified Home Retention Specialist
Blogging at: http://TheBremnerGroup.com/blog
I think it's best to ask a lender. If you have equity you might be in a good postion to purchase another home. I tried to do the same and was told as long as I qualified with income requirements it was doable. Now, the other option might be if you are going to declare it our principle residence and rent out your current home. If it's an income property a lender might factor the income but unless it's for a relative or owner/occupy I don't think you could put less than 20% down.
If you want referrals to a few lenders that could run some scenarios just let me know.
The Carrabba Group
Keller Williams Hollywood Hills
The last time I checked with a lender the required down payment for a second home was 10% however lending requirements seem to change almost daily now. I'd imagine it may be somewhere near this percentage should your credit and documentation match their requirements. If you would like the number for a great lender I would be happy to pass along.
Keller Williams Realty
If you have equity in your current home, you my be able to refinance that property or put a 2nd mortgage on to reduce the cash for the new place!
Also, seller financing of a 2nd deed of trust might be available (under 1st lender guides).
There are also some programs from lenders with 10% down, but the rates are higher and there is the additional Private Mortgage Insurance.
If you have a Financial Planner, that is the best person to start with and then go to a mortgage broker (like me) to discuss loan options.
Also, do not commit loan fraud! If you or a relative is not going to live there, don't say that you are in order to get a lower downpayment.