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Investment Property vs Second Home Loan

I want to purchase a second property for my mother and I would be there while I visit regularly. Would I be eligible for a second home loan or would this be considered an investment property? by mike.dubis19 from West Chicago, Illinois. Jul 31st 2017 Reply


Bill Tottleben (BillTottleben)
#4 ranked lender in Missouri - 12 contributions

how far away is the future area fro your mom?is it near a recreational area such as a lake?

Jul 31st 2017
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Bill Tottleben (BillTottleben)
#4 ranked lender in Missouri - 12 contributions

Second home vs. investment propertyBut what makes a home a second home or an investment property?You can consider a second home to be like a vacation home. You're buying it for your own pleasure, and you live in it for a certain period of time every year. If you don't live in it on a semi-regular basis, lenders will instead consider it an investment property.To qualify as a second home, the property must also be far enough away. Generally, lenders will only consider a property as a second home if it is at least 50 miles away from your primary residence. This might seem odd, but why would your second home, a home that you would consider a vacation home, be located any closer to where you already live?An investment property is generally one in which you don't live. Instead, you rent it out throughout the year. You might plan on holding the property until it appreciates enough in value to allow you to sell it for a healthy profit. Unlike a second home, an investment property can be located near your primary residence.

Jul 31st 2017
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John Paunan (jpaunan)
#24 ranked lender in Illinois - 22 contributions

Probably too difficult to discern in this forum, but it will probably depend on the entirety of the circumstance. I would say your intentions for the property are fine to treat as a second home, but it will depend on the distance from your own home if you can actually treat it like a second home. There would have to be some distance between your current home and that other property, otherwise, an underwriter would not perceive it as really a second home where you would stay. Does that make sense?

Jul 31st 2017
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Bill Tottleben (BillTottleben)
#4 ranked lender in Missouri - 12 contributions

I may be able to get owner occupied rates fro you.call any time..618-540-8132

Jul 31st 2017
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William J Acres (William_Acres)
#2 ranked lender in Arizona - 7,927 contributions

Based on your description, you would be an investor.. but your mother could purchase the home and add you as a Non-occupying co-borrower. This way, you get the best rates offered and the lowest down payment requirement since the purchase would be considered an "owner occupied" purchase transaction. The best advice I can give you is to contact a mortgage bank/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 a Banker/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 banker/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 big box banks. I'm a preferred Lender with Arizona and California being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com NMLS# 226347 / RPM Mortgage NMLS 1541014 / AZMB0121893

Jul 31st 2017
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Potentially there is a way to make it a 2nd home depending on how often your there. It's just like people who have a home in the suburbs & a condo in the city. If we explain it right we can probably get it as a 2nd home which will give you a better rate

Jul 31st 2017
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