Comments on: Buying house as second home or as an investment property? Which one is better?

By: mortgage help

mortgage help — Tue, 30 Dec 2008 02:41:18 +0000

Second home rates are as good as primary residence rates. Investment property rates are higher. The property must qualify as a second home… this is not for you to decide, but for the Lender to decide which guidelines it meets. Typically it’s a second home if it’s in a resort area and 300+ miles from your primary residence.

By: Justin

Justin — Sun, 28 Dec 2008 18:54:23 +0000

In the lender’s eyes, an investment property is much riskier to provide financing for than a second home. However, you cannot just call it whatever you want to try to save a buck.

As Mazziatplay stated, it has to make sense. A second home would typically be in a vacation area, for instance. If it is less than a few hours away, why would you need a second home there? These are the type of questions that the lender will ask.

There is a reason for the three types of classification of your residence. If you’re untruthful on your application, it is fraudulent, no if’s, and’s, or but’s…

By: mazziatplay

mazziatplay — Sat, 27 Dec 2008 18:15:23 +0000

The down payment requirements may vary greatly between a second home purchase and a rental as may the closing costs. Investors consider the purchase of investment property a higher risk than that of a second home and price the loan accordingly.

To qualify as a second home purchase, it has to make sense. For instance, buying a home in another part of town and calling it a second home doesn’t make sense. Buying a home in the mountains or at the coast when you live in the city does.

Telling your lender that it is a second home purchase and then using the property as a rental is loan fraud.

By: Phoenix

Phoenix — Wed, 24 Dec 2008 10:34:32 +0000

If you purchase the home as a second home, then NO you cannot rent it out. That is a provision of the loan. That is the difference in the methods. The second home is for your own use and th investment property is generally for rental or commercial use.