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I own a home that I paid off for all in cash. Is it possible to purchase a second home with a FHA loan?

by steven.h55379 from Templeton, Iowa. Sep 28th 2015 Reply

William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,727 contributions

FHA only allows for "owner occupied" properties.. so if you plan on living in the new home, then yes.. but if you have a good credit score and good DTI ratios, then conventional is a better option. You will need a minimum of 5% down, but there is no upfront MI required on a conveitional loan, and the MI is less expensive, plus with conventional financing, once you have paid MI for 2 years or more and once you obtain 20% or more in equity, you can request for the MI to be removed, and you wont have to refinance to do it.. with FHA, the MI is there for the life of the loan.. There are even more lending options available, but to see what you qualify for, you should contact a LOCAL mortgage broker and apply with them. Once they see your complete loan profile, they will be better equipped to advise you properly. Also, by applying with your LOCAL Broker, you have an advantage because he's familiar with local customs and works with many lenders with each one offering a different type of lending program. This is unlike the local bank which typically only has a few lending programs. The more lenders, the more lending options, and the more likely your scenario will be accepted.. Plus, the broker is experienced in seeking out the best loan terms for your particular scenario, and he has lower overhead which typically results in lower rates and fees than most of the larger lenders.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 NMLS# 226347

Sep 28th 2015
David Baker (David Baker)
#1 ranked lender in Iowa - 52 contributions

William Acres posted some very valid and helpful information. I am a mortgage professional in Des Moines, IA. Feel free to reach out if you need anything.

Sep 28th 2015
Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 4,092 contributions

You don't mention if this is an investment property, vacation home, or something different. FHA is an "owner occupied" loan only... Contact your local mortgage broker to discuss the existing house versus the new house, and if you'll be able to use FHA or not.

Oct 12th 2015
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