Home Buying in San Diego>Question Details

Greg S., Renter in San Diego, CA

My mom wants to put a down payment on a second home that I will be living in. Is it possible to provide a 10% down payment or is 20% the min.?

Asked by Greg S., San Diego, CA Thu Sep 20, 2012

My mom will not be living in the home, I will basically be a tenant renting from her.

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Great answers! By any chance, are you in school? If so, your Mom may be able to buy as a "kiddie condo" (no, really...that is what the program is called!!!). The program has specific guides, but it may work for you.

It is pretty unlikely that a lender would approve the file as a "second home" since your Mom lives in Ventura...though not completely out of the question. I would need specifics and there would have to be some pretty convincing compensating factors.
0 votes Thank Flag Link Sat Sep 22, 2012
Hi Greg,
There are many different down payment options ranging from zero to 100%. Your lender will be able to show you the benefits of each type of loan package and help you make the right decision for you and your mom.
Of course the smaller the down payment the higher the monthly mortgage, but there are other factors to consider.
Non owner occupied financing usually carries a higher interest rate. Is there any way that you could be on title and there by get a owner occupied rate, which will save you money.
Janet McCarthy
Connect Realty
0 votes Thank Flag Link Fri Sep 21, 2012
It's probably going to be classified as an investment property, so you're most likely looking at needing 20% down. Check around with some local brokers ( a bank will probably have too strict of guidelines) to see if you can find one willing to loan with a lower down payment.
Best of luck!!
0 votes Thank Flag Link Fri Sep 21, 2012
This would be a question you need to direct to your loan officer. If you would like a referral please feel free to contact me direct (858) 922-2812.
0 votes Thank Flag Link Fri Sep 21, 2012

There are many ways to do a loan, I have a strong lending and underwriting background and would like to help, but mostly as your Realtor. I can help organize the transaction so it works for both of you. Like I tell my clients, tell me the whole truth so we can structure the loan the right way without surprising the lender, processor and underwriter. You'd be surprised how long the truth will help you if you structure it correctly.

Most lenders are selling vanilla right now, and sometimes it takes someone who know how to do a loan that has a little more spice.

Hector R. Gastelum
Realty Executives Dillon
REALTOR #01382940
efax 619-270-2516
0 votes Thank Flag Link Fri Sep 21, 2012
Thank you all for the information and suggestions.

I should be more specific.

It is not an FHA loan, she will be taking out the loan on her own and will be the sole owner, and she lives far enough away (Ventura County) to have the property considered a second home.

It seems that 20% down is what she will have to do under these circumstances.
0 votes Thank Flag Link Thu Sep 20, 2012
Hi Greg,

If both you and your mom will be on the loan, you may be able to use a conventional loan if you both qualify. You'll need to pay mortgage insurance until your equity gets to 20% or 22%, but it's better than an FHA loan with 3.5% down, where you have to keep the mortgage insurance for 5 years minimum.

If only your mom's going to be on the loan, she'll likely need an investor loan, which will require 20-25% down, although there may be loan programs that require less.

If you are taking out the loan, and your mom's giving you down payment money, then you may be able to go conventional with mortgage insurance.

I can send you some lenders to call to go over your options.

Warm Regards,

Cory La Scala, REALTOR
Independence Realty
Lic # 01443391
0 votes Thank Flag Link Thu Sep 20, 2012
Hi Greg,
I have a great lender to refer you to. He can help you with the particulars - is it an FHA loan (government backed)? If so it may allow for a smaller down payment than the standard 20% down.
Is your mom going to be the sole owner or is she a non-occupant co-borrower (borrowing with you)? Does your mom live nearby (making this home an investment property) or does she live far enough away to classify the purchase as a second home?
All of these items (and more) need to be considered to get you the best loan terms for your and your mom's situation.
I'd call Shanne Sleder with the Mortgage Planners. He's sensible, low key and very knowledgeable. He's got lots of sources for money available to fit all sorts of buyers' needs. Shanne's number is 858-829-7186. His email is Shanne@CAmortgageplanners.com .

Please contact me at 619-857-5881. I can help you locate the right property once you and/or your mom are qualified.

Thank you and good luck,
Mary Lawler, Realtor
Realty Executives Advantage
Web Reference: http://www.MaryLawler.com
0 votes Thank Flag Link Thu Sep 20, 2012
Hi Greg, Your mom should discuss her financial situation with a lender and see what options she has and how much she can qualify for. I'll be happy to recommend lenders to your mom, if she does not have a lender she knows.

Fay Yates
CA DRE#00853913
0 votes Thank Flag Link Thu Sep 20, 2012
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