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Down payment on 2nd Property help?

I purchased a duplex last year with 10% down, and i have 750 credit rating, and it is going on a year that I have been living in the house. The duplex would more than pay for its self in rent. The current amount I owe on the duplex is about 2.5 x my annualized income (3x my salary alone) I was toying with the idea of buying another duplex and living in that one, and renting out my current duplex. Can I put 10% down on that one too?How much should I expect to be required to have in reserve?If both houses are about 5x my income together would a lender be ok with that? by 2prophelp from Port Jarvis, Pennsylvania. Nov 23rd 2009 Reply


Leo Harvey (LHARVEY)
#6 ranked lender in Pennsylvania - 146 contributions

This is a realistic plan that would require you to have the current duplex rented before settlement to prove that you intend to occupy the newly purchased unit as a primary residence. To gain any rental income from the first unit you would need to use a total of 75% of the gross monthly rental income plus the monthly expenses of ownership such as mortgage payment, insurance, maintenance etc. The 10% down payment is also realistic but the lender will probably require 6 months of reserves to qualify. If you would like to have an analysis run to determine whether you can qualify please contact me at your convenience. Leo Harvey Advisors Mortgage Group. lharvey@advisorsmortgage.com

Nov 25th 2009
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Joe Shamie (Joe Shamie)
#4 ranked lender in New Jersey - 1,412 contributions

If the new house WILL be your promary residence you might be able to get a way with a 10% dwon payment. However, you will have to go to great lengths to prove that it will be your primary.

Nov 23rd 2009
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