Home Buying in 19134>Question Details

Mukesh Yadav, Other/Just Looking in 19341

Last year i bought the principal residence and i got tax credit. I m thinking to buy another house and put in rent . Is that possible?

Asked by Mukesh Yadav, 19341 Fri Oct 22, 2010

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Hi Mukesh,

How are you? Thank you for your inquiry. Yes, you can buy as many homes as you are financially capable of doing. The only thing you need to keep in mind when buying another home is that it will be deemed as an investment property by mortgage lenders. Therefore, if you are planning to take out a mortgage, they would require you to put at least a 20% or more as down payment in order for you to purchase the 2nd home. Unless you are doing 100% cash deal, then there is nothing to worry about.

On the other hand, I've heard some cases if you got tax credit on the original home that you purchased and you haven't lived there for at least 3 or more years as your principal residence and then go out and buy another home as your PRIMARY residence in less than 3 years, you are required to pay back the tax credit to the government. But if you are still living in your original home that the tax credit was offered and just buy other investment homes, it should be fine.

Hope that helps! If you have any other questions, please feel free to email me at Phong.Lam@c21ag.com or call me at (267) 918-1880. Thank you and have a good evening!

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Phong Lam, CSM
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0 votes Thank Flag Link Tue Nov 2, 2010
Mukesh,

You can buy another house as an investment property. The rate will be a litle higher and the bank will require a larger down payment. Although you originally intended to occupy your primary residence there is nothing that prevents you from changing your mind. FHA can pull the loan if you do not occupy ther property for the first 90 days( or 6 months)??? not sure on the exact time frame (check your loan docs)
However you can also buy another house as your primary residence and rent out your current home. If you are really intending to do that you can qualify for better financing and a lower down payment.
A couple of caveats: People who are really trying to buy as an anvestment propertgy and say it is their primary usually get caught and I any broker worth his salt does not want to get caught in fraudulent activity.
Secondly, if you originally had an FHA loan and looking for another, the lender will want to see 25% equity in the first home before they will lend again.

Good luck and call me if you need further assistance.

Best Regards,
Alan Openshaw
Cornerstone Lending Inc
Southampton Pa 18966
215 953 0800
cell 267 992 7276
VOTED BEST IN BUCKS 2010
0 votes Thank Flag Link Sat Oct 23, 2010
Actually, this depends on what your mortgage loan paperwork, if you took out a loan, says about it. A lot of lenders usually tell you that you must live in the residence for "x" number of years before you can rent it out.
0 votes Thank Flag Link Fri Oct 22, 2010
Hi Mukesh
Yes you may buy another house. One thing to keep in mind is how you go about the purchase and what you are going to use it for. The are ways to defer the capital gains . If you would like some more info on this please feel free to call or email me and I would be more than happy to help you out.

Have a great day
Rich Friedman
Realtor
Keller Williams Real Estate
300 Welsh Rd Bldg 4 suite 145
Horsham Pa 19044
License # RS311792
267-679-1088 (Cell)
friedman.richard@verizon.net Email
0 votes Thank Flag Link Fri Oct 22, 2010
You can buy as many houses as financially possible but you will not get another tax credit.
If you want me to help you find another house please let me know and i will assist you.

Best of Luck,

Alexander Shulzhenko
Advance Realty One

http://www.eRealtyFind.com
realexs@gmail.com
267 738 0886
Web Reference: http://www.eRealtyFind.com
0 votes Thank Flag Link Fri Oct 22, 2010
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