Really Bob? Are You Sure About That?!
I’m buying another property, but I plan to call it a second home so that I can get a better interest rate.
No You’re Not: Unless it has vacation/resort amenities and is 50+ miles away from your primary residence, it will be treated as an investment property and carry a higher interest rate].
- WHY? Because it’s not your vacation home
I have an FHA loan on my home, and I’m going to use FHA again to minimize the down payment on my second property.
No Sir: You can only have one FHA loan at a time and it must be on your primary residence (and besides, there are conventional financing programs that offer loans as high as 97% of value).
- WHY? Because FHA financing is meant to help consumers purchase their home
Unless I’ve had 24 months of self-employed earnings, I’ll never get a residential loan.
Not True: Depending on your ability-to-repay, Freddie Mac may only require one year of tax returns from your new business.
- WHY? Because Freddie takes compensating factors into consideration
I’ll still profit by selling one of my properties to my son – and he can get maximum FHA financing because I will co-sign and it will be his primary residence.
Incorrect Again: A parent/child profit-sharing relationship is deemed an “identity of interest” transaction, and the buyer is restricted to 75% loan-to-value when there is a non-occupying co-borrower.
- WHY? Because the borrower should solely benefit from primary home ownership