What is the down payment to buy a 2nd home which would be my primary residence? I plan to rent the home I am currently live in.....

Asked by Jonathan Choi, Kirkland, WA Sun Oct 16, 2011

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Mon May 7, 2012
Good morning, Jon....
If you are not a Veteran, than an FHA loan with a minimum of 3.5% down is possible. However, you are required by FHA to buy a primary residence. A 2nd home is defined as a vacation home and is different from a primary residence. If your purchase is truly a 2nd home, you are looking at Fannie or Freddie which, depending on the area, may require 5-10% down with MI. To rid yourself of the MI, you would be required to put 20% down.

John's list of questions are key to giving you a more accurate response! Nice job, John!

Regards, Jim
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Deauvil, , California
Wed Oct 19, 2011
Usually 20% depending on your lender.
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Louri Groves…, Agent, Fountain Valley, CA
Mon Oct 17, 2011
Hi Jonathan,

As John has mentioned, income to debt ratio, credit scores, how much in reserves, and down payment may impact what type of loan program you may qualify for.

Our own lender, when we moved to another home and turned our former primary residence into a rental, required us to secure a tenant and submit a signed lease.

There are several very nice homes priced competitively in Long Beach. Please feel free to contact me if you have any questions or would like my help in finding your next home. I love Long Beach and know the area very well. I have friends and family who lived and worked in LB since 1993.

Also I have a short list of excellent lenders in the area, if you need a few to run numbers for you.

Hope this has been helpful!

Louri Groves
Prudential California Realty
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Chris K Soon, Agent, Bellevue, WA
Sun Oct 16, 2011
Hi Jonathan, I live and work in the 98006 Zip and be able to assist you. I am a realtor but I work with several mortgage broker and lender, including major banks key, BOA, wells fargo. In today's market, most lender are looking for minimum 20% down to qualify you for loan and also they would want to see a signed rental agreement. I also can assist you renting out yr current home. Visit my website : http://www.chrissoon.com for more information. My tel : (425)802-0518 , e-mail : chrissoon@tecrealestate.com
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Jirius Isaac, Agent, Kenmore, WA
Sun Oct 16, 2011
I also recommend managing your own home if you are so inclined. I can share with you incredible applications & leases & some guidance should you want to go this way. Mortgage insurance is subject to the purchase price & the amount you put down. I can get quotes for you on different scenarios. You can also buy without paying mortgage insurance by increasing the interest rate & letting the lender pay it for you, although I do not like this alternative as well. Contact me any time. 206-841-9976
Web Reference:  http://www.metromgi.com
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Scott Godzyk, Agent, Manchester, NH
Sun Oct 16, 2011
Jonathan the best person to ask is a local and trusted loan officer who can prequailify you at no cost, they will look at your credit plus your financials and let you know if there are any programs that you may quailify for. If this will be your primary resience, the correct thing when asking for a quote is you are buying another home or a new home, buying a second home often refers to a vacation home which leads to a higher down payment and interest rate.


Please see my blog for tips and advice on getting a mortgage
Web Reference:  http://www.ScottSellsNH.com
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Jirius Isaac, Agent, Kenmore, WA
Sun Oct 16, 2011
As little as 5%, but unless you do 20% down, you will have to pay mortgage insurance. As long as you go conventional, you will be able to drop the mortgage insurance if you ever get 20% equity in the property. That is a smart move to rent your house as this is a terrible time to sell. You will have to qualify for both house payments in your debt to income ratio, but we will count 75% of the rental payment as income.

I am both a mortgage & real estate broker. Feel free to call me any time if you want me to run some numbers for you to help you see what you can do.
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Larry Mandel, , Sammamish, WA
Sun Oct 16, 2011
A minimum of 20% is what I advise for a down payment. Less than 20% raises flags with lenders. They are nervous about loaning to someone who might not have enough to keep up the mortgage. Lenders will loan with less than 20%, but may require Mortgage Insurance." Mortgage insurance can easily add a couple of hundred dollars to your monthly payment. If you are planning on moving to a new house and renting your current home, please visit the website of my property management company. http://www.threekeyspm.com. Working with me to buy a home and to property manage your other home does have financial benefits for you. Do not hesitate to contact me at any time.

Larry Mandel
Web Reference:  http://topfloorhomes.com
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Dan Tabit, Agent, Issaquah, WA
Sun Oct 16, 2011
Buying a second home as a primary residence does not have a down payment limitation. However, you may find that if you don't have sufficient equity in the first home or adequate income to cover both properties (not including your rent, since you are not receiving any yet) you may run into some limitations.
Last I checked, lenders wanted borrowers to have at least 25% equity in the first home to consider a loan for a new one.
Assuming this is the case, I checked with one of my lenders who would consider the loan with 10% down. Anything less than 20% will require mortgage insurance.
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Nancy Larkin, Agent, Bellevue, WA
Sun Oct 16, 2011
Hi Jonathan,

It would be best to contact a reputable lender, which I have several. More than likely it will be 20% or more, but I'm a Realtor. If you need some names, I would be happy to pass them on to you. If you need any help in finding that specific property, I can help you there as well. You can contact me at: nlarkin999@comcast.net or 425.241.2588. My best to you. Nancy
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