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Thread: 2nd home purchase

  1. #1

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    Default 2nd home purchase

    MB
    just wanted to see if i could gather some advice in purchasing a 2nd home regarding using home equity vs. a standard rental loan and taxes to consider and any other info. that may be helpful.

    thanks
    john+


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  3. #2

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    Default Re: 2nd home purchase

    Don't use equity because if you can't make the payments work on the 2nd house you don't want to lose both in foreclosure.

    Just my opinion

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  5. #3

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    Default Re: 2nd home purchase

    pmcinto

    i see what your saying, but i did not mention that 1st home is paid for and this will be my second home as investment property. does that change your opinion or do you still say no?

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  7. #4

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    Default Re: 2nd home purchase

    Oh Well, that does change things if you have no mortgage on your primary home. You might be able to get a better rate on a home equity line than a mortgage for a 2nd home. I would just make sure that you'd be able to cover the equity loan payments for 6 months assuming it is vacant that long. See if you can compare the rates. I do know that real estate investors do buy additional investment properties with cash deals using equity lines.

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  9. #5

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    Default Re: 2nd home purchase

    Hrmm. An investment? The problem is, no one seems to know what the 'recovery' in housing prices is going to look like, or when it is going to occur. It is very hard to sell for a profit - and if home loans continue to be hard to get (will even get harder if the Govt is able to get rid of Fannie and Freddie) prices may continue to stay flat.

    Caveat - the bird is very risk averse.
    "All the prophets of Doom, Can always find room, In a world full of worry and fear..." - Protest Song, Monty Python

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  11. #6

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    Default Re: 2nd home purchase

    Note: I have seen a lot of news reports that many people are ditching their homes (by choice or not) and going into rentals, so the rental market has been pretty strong.

    Just a thought.

  12.  
  13. #7

    Default Re: 2nd home purchase

    Quote Originally Posted by Silverbird View Post
    Hrmm. An investment? The problem is, no one seems to know what the 'recovery' in housing prices is going to look like, or when it is going to occur. It is very hard to sell for a profit - and if home loans continue to be hard to get (will even get harder if the Govt is able to get rid of Fannie and Freddie) prices may continue to stay flat.

    Caveat - the bird is very risk averse.
    You SHINE through once again!!!

    Plus -- Rental Properties can become a huge hassel and often become more problems than the dream they were initally foreseen to be.

    LOCATION is Everything!!!

    If you've got a 'Goldmine' for a bargain that you're confident is structurally solid and a little fixer up will double the price then go for it.

    For those who can afford it -- this is most certainly the most ideal time to take advantage of today's housing Market.

    Bottomline - soak in Silverbird's words - take them to heart and go from there.

    GL

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  15. #8

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    Default Re: 2nd home purchase

    If you're looking for rates, my curret HELO with B of A is 3.25%. Don't know how it compares to other lenders but it's good enough for me.

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  17. #9

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    Default Re: 2nd home purchase

    as far as rental prop, i don't know if i want to sell as long as i have a good tenant and pay down the mortgage, eventually it will be retirement income once the house is paid for. 1st house is on a 15 yr mortgage with 12 yrs left on it. this 2nd rental home i'm considering, we already have a tenant. my wifes BFF. ( i know dangerous dealing with a freind and bizzness). but she is in need and we can help each other in our own little way. i will probably go 30 yrs on this one with no prepay penalties. all right folks i'm ready give it to me, all input will be appreciated.
    thanks MB


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  19. #10

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    Default Re: 2nd home purchase

    jpcavin
    refresh my memory again on what HELO is?

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  21. #11

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    Default Re: 2nd home purchase

    Sorry, meant HELOC - Home Equity Line of Credit. Minimal cost. Low interest.
    Variable rate, interest only payment for specific period of time. Then converts to fixed rate. You can always increase the payments to whatever you can afford.
    There's pros and con's. I personally have the money to cover the loan if interest rates were to hike up. In the mean time, taking advantage of the low interest rate.
    But I am no genius compared to the others on this board. I would seek their advice. I have much more to learn.

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  23. #12

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    Default Re: 2nd home purchase

    jp
    thanks for the advice. i like knowing my rate i'm looking at @ 4.25% fixed for 30yrs.

    MB
    u heard jp, and all comments are welcome.
    thanks

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