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Joe Doyle, Home Buyer in Philadelphia County,...

Own present home and buying a home for retirement. How will this affect the mortgage I am applying for? will the new home be considered investment ?

Asked by Joe Doyle, Philadelphia County, PA Sun Nov 13, 2011

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Don't assume you need to put up with arbitrary institutional guidelines.There is private and seller financing available as well.
1 vote Thank Flag Link Sun Nov 13, 2011
It appears from a previous question you asked that you will be relocating to the Tampa area after your retirement. If you own your PA home "free and clear" your mortgage on the Tampa property "could" be considered primary if you intend to live here more than six months of the year. Make sure you discuss that scenario with your lender
1 vote Thank Flag Link Sun Nov 13, 2011
Buying from another state it would be considered a second home which does give you a better rate than income property. That said you will need to have a 720 to do less than a 20% down payment. You will also need to show that your retirement income can cover both payments or that you will be continuing your employment for more than two years to use your employment income. There are a few other factors to consider and you may want to speak to a mortgage professional in Florida to determine what your best plan of action should be. Contact Kevin Reeves with New Penn Financial if you would like to discuss your options 813-728-4992.
1 vote Thank Flag Link Sun Nov 13, 2011
If you will be staying in your present home the new one will be 2nd, if you intend on moving to the new one within 90 days of close its a primary. If you purchase a 1-4 unit property and move in its primary. The test is ...intent.
1 vote Thank Flag Link Sun Nov 13, 2011
Since you are not retiring soon, your new home would be classified as a 2nd home (or vacation home). In most cases there is little difference in rate or non at all. Unless you live in the new home 181 days a year you will not be eligible for homestead (lowering of your taxes).
Joshua is wrong. If you use your employment income for qualification and your job is not relocated you do not qualify for owner occupied.
0 votes Thank Flag Link Mon Nov 14, 2011
Also Joe, you may want to check with Credit Unions as far as rates and lending requirements for a 2nd home because you may not have to "fit" into the standard criteria that virtually all lenders use. You see the lenders normally just immediately sell off your loan to Fannie Mae or Freddie Mac so it pretty much must fit into the criteria as far as down payment and the rate you pay. It's rare that a bank or lender actually keeps your mortgage and takes the risk.

Good luck!
0 votes Thank Flag Link Sun Nov 13, 2011
The new home would only be considered investment property if you plan to rent it out. Otherwise it would be a second home. But if you lived in it more the 6 months a year, it would be considered your primary residence.
Web Reference:
0 votes Thank Flag Link Sun Nov 13, 2011
Hi Joe,

Here's a very helpful website about mortgages by a highly respected Wharton Business School Professor:

One of the "Upfront" lenders recommended is:

You can get preapproved quickly and find out your best rate and low lender fees and downpayment.

All the best,
Alma Rose Kee, PA
Future Home Realty
0 votes Thank Flag Link Sun Nov 13, 2011
Lynn...this is a retirement home which I hate to assume but most likely their income is from either social security, pension, or both. That means their income can be anywhere. If your purpose is to live here full time, then it is a primary residense.
0 votes Thank Flag Link Sun Nov 13, 2011
Joe Doyle, Your present home will remain your primary residence. Your next residence will most likely be considered your second home. Second homes are similar to primary residences, but, they are in a different zip code, have a different use (condo instead of a home) and are typically located at least 50 miles from your primary residence. If you did not own any property and decided to purchase a property in an area that you do not receive income it will be categorized by a lender as a second home. For example, you live in Philadelphia County. Your income is sourced from there, thus, when you select a Florida property it will be categorized as a second home for lending purposes.

If the next residence you select is a duplex, a small multi family or some type of residential property that will obviously provide income this property type would fall into the category of an investment property. Take the time to get pre approved before you start looking for a property. The process will help you to understand it better.
0 votes Thank Flag Link Sun Nov 13, 2011
Hi Joe!

I do not work in the tampa area, but wanted to help you out.

Florida is a huge 2nd home market and there are plenty of programs for second home purchases.

You might miss those Philly Cheesesteaks!!!!

Take care,
0 votes Thank Flag Link Sun Nov 13, 2011
If you are looking for your second home in the Tmpa By area, I'd love to help you find one. There are a lot of great deals :)

Audrey Kooistra
Charles Rutenberg Realty
0 votes Thank Flag Link Sun Nov 13, 2011
I believe you found the right person in Joshua to help you and answer your question.
0 votes Thank Flag Link Sun Nov 13, 2011
You indeed can buy a new primary residence and still own your existing home. There are some items we would need to cover but it is possible. Contact me for further details. I look forward to hearing from you.
0 votes Thank Flag Link Sun Nov 13, 2011
Is your retirement home in another city? You will likely qualify for 2nd home finance if your new home is more than 20 miles from your current residence. I can put you in touch with a loan professional to verify this.
0 votes Thank Flag Link Sun Nov 13, 2011
The Lenders will only allow you one PRINCIPLE RESIDENCE.
You cannot owner/occupy two houses at once.
A lot depends upon your new Lender.

Good luck and may God bless
0 votes Thank Flag Link Sun Nov 13, 2011
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