Second & Investment Homes

Whether you dream of relaxing on the beach, playing golf in the desert or hitting the slopes of Tahoe, a secondary residence is a dream and goal for many of us. Of course, there are many others who prefer to begin building their real estate empire, one investment home at a time!  Either way, Comstock Mortgage has you covered.

Lets start with  a second (vacation) home. The good news is these properties are treated the same as a primary residence when discussing interest rates. There are no differences in rates/cost for a vacation home. However, because this is considered “another” primary home of yours, you must qualify for this home payment in addition to your existing home and obligations without the benefit of any incidental income it may be able to generate. Additionally, these homes typically need to be in a “vacation” type of area and sufficient distance from your primary home. This is to avoid buyers using the second home purchase as an investment property.  These properties require 10% down.  As always, there are exceptions to everything, but if you are in the market for a second home, condo, or townhome, give us a call today!  Please check with your tax advisor about the deductibility of interest and expenses of a secondary residence.

Now, Investment properties can be a little more complex, but don’t let that scare you, investment homes are incredibly priced lately.  It has been YEARS since an investment home buyer could put down a reasonable down payment and actually have the income from the home cover the cost of ownership. Well, now is one of those times. With plunging interest rates, bottomed out home prices and INCREASING rental demand and rates, a perfect storm has hit the investment home market.

Here are a few things to remember. First, if you are buying your very FIRST investment property, you may be required to qualify for this home payment WITHOUT the benefit of the rental value (similar to 2nd home above). Because you do not have a history of finding tenants and managing investment homes, the underwriting may be a little more strict on this FIRST home. Once you own that home or have a history of owning rental homes, you can use 75% of the market rent to help qualify for the new loan payment. Typically these loans require 20-25% down payment and the rates can be about .5% higher than a typical owner occupied interest rate.  

NOTE: for those of you with college age children. If you are buying a residence for your kids to live in, consider our FHA program which would allow you and your children on the loan. Only 3.5% down and fantastic rates!

Please check with your CPA or advisor about the tax consequences of owning investment homes and the deductibility of interest and expenses.

When you are ready to buy that next property, all of us at Comstock Mortgage are ready to assist you and guide you through the process. We do this every day.

Thank you!