Second home

Howdy gang.

My wife and I own a home in one city, and I work in another (about 80
miles away). I am commuting right now, but we are thinking about buying a
small (small!) home in the city where I work that I can use as a stay-over
on late nights. Initially I was living with a classmate/roomate, and
paying rent got old. Now putting miles on the car is getting old.

We've been in our current home (our first) for two years now. I am just
wondering how to get the ball rolling on a second house. Will the loans
be different? Are there special things we need to do or take care of?
Will it be "OK" from the standpoint of loans, taxes, etc, for me to live
half of a work week at one place and the other half at another? We're not
sure how to go about figuring if we can get a second home.

Thanks for any advice.


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Re: Second home

In article <dj41hm$e4o$>,
bolt thrower <> wrote:

> We've been in our current home (our first) for two years now. I am just
> wondering how to get the ball rolling on a second house. Will the loans
> be different? Are there special things we need to do or take care of?
> Will it be "OK" from the standpoint of loans, taxes, etc, for me to live
> half of a work week at one place and the other half at another? We're not
> sure how to go about figuring if we can get a second home.

Your first step is to go to the bank and get pre-qualified. That
will pretty much answer all your questions. A 2nd home is going
to be a little harder to qualify for, and the rates will be a
little higher. That is par for the course since it is not your
primary home.

Given that rent is such a good deal right now, and you don't
have to pay closing costs to get in and out of a rental,
why don't you look for an efficiency somewhere that you can
rent by yourself? In the long run, it will be far cheaper
than buying, and you have far more options for getting out
of the deal when the time comes.

-john-

--
============================================================ ==========
John A. Weeks III 952-432-2708
Newave Communications
============================================================ ==========

Re: Second home

"John A. Weeks III" <> wrote in message
news:

A 2nd home is going
> to be a little harder to qualify for, and the rates will be a
> little higher. > --

This is true if you are in a weak negotiating position, making a low down
payment and having so-so credit. If you make, say, a one-third down payment
and have excellent credit, you will be able to get the same interest rate
you would get for your principal residence.

Re: Second home

FYI: Most lenders have a restriction regarding the proximity of a 2nd home
from your primary residence. Typically, a second home cannot be located
within a radius of a specific number of miles from your primary residence.
Exceptions to this rule would be that the 2nd home offers certain amenities
that your primary residence does not feature (i.e. beach, etc.).

"bolt thrower" <> wrote in message
news:dj41hm$e4o$
> Howdy gang.
>
> My wife and I own a home in one city, and I work in another (about 80
> miles away). I am commuting right now, but we are thinking about buying a
> small (small!) home in the city where I work that I can use as a stay-over
> on late nights. Initially I was living with a classmate/roomate, and
> paying rent got old. Now putting miles on the car is getting old.
>
> We've been in our current home (our first) for two years now. I am just
> wondering how to get the ball rolling on a second house. Will the loans
> be different? Are there special things we need to do or take care of?
> Will it be "OK" from the standpoint of loans, taxes, etc, for me to live
> half of a work week at one place and the other half at another? We're not
> sure how to go about figuring if we can get a second home.
>
> Thanks for any advice.

Re: Second home

"bolt thrower" <> wrote in message
news:dj41hm$e4o$
> Howdy gang.
>
> My wife and I own a home in one city, and I work in another (about 80
> miles away). I am commuting right now, but we are thinking about buying a
> small (small!) home in the city where I work that I can use as a stay-over
> on late nights. Initially I was living with a classmate/roomate, and
> paying rent got old. Now putting miles on the car is getting old.
>
> We've been in our current home (our first) for two years now. I am just
> wondering how to get the ball rolling on a second house. Will the loans
> be different? Are there special things we need to do or take care of?
> Will it be "OK" from the standpoint of loans, taxes, etc, for me to live
> half of a work week at one place and the other half at another? We're not
> sure how to go about figuring if we can get a second home.

There is a fine line between a "second home," (for personal use, vacation,
etc.) and income property that you rent to tenants. Even though some lenders
like to make this distinction, it is not very meaningful. It is possible to
buy a vacation home only for taking vacations and then later rent it to
tenants, or to use it for personal vacations part of the time and rent it
out the rest of the year. It is also possible to buy rental property for
income and then later decide to live there yourself half of the year or most
of the year. (My wife and I have owned property under all three of these
scenarios.) As long as you pay the monthly mortgage payments on time, you
should have no trouble with mortgage lenders no matter what you do with the
property once you have bought it.

Re: Second home

In article <DQv5f.34376$>
wrote:

> "John A. Weeks III" <> wrote in message
> news:
>
> A 2nd home is going
> > to be a little harder to qualify for, and the rates will be a
> > little higher. > --
>
> This is true if you are in a weak negotiating position, making a low down
> payment and having so-so credit. If you make, say, a one-third down payment
> and have excellent credit, you will be able to get the same interest rate
> you would get for your principal residence.

It has been so long since I have heard of anyone putting money
down for a house that I now assume that every loan is a zero
down deal.

-john-

--
============================================================ ==========
John A. Weeks III 952-432-2708
Newave Communications
============================================================ ==========

Re: Second home

"John A. Weeks III" <> wrote in message
news:
>
> It has been so long since I have heard of anyone putting money
> down for a house that I now assume that every loan is a zero
> down deal.

If your only option is a zero down deal, you probably shouldn't be buying a
second home. Or maybe not a first one either.

Re: Second home

In article <BHC5f.37789$>
wrote:

> "John A. Weeks III" <> wrote in message
> news:
> >
> > It has been so long since I have heard of anyone putting money
> > down for a house that I now assume that every loan is a zero
> > down deal.
>
> If your only option is a zero down deal, you probably shouldn't be buying a
> second home. Or maybe not a first one either.

I totally agree. I read a newspaper report about 6 months ago
about Dane County, Wisconsin, an area that has seen rapid price
growth. The report said that 95% of first mortgages were no
money down deals at that time.

-john-

--
============================================================ ==========
John A. Weeks III 952-432-2708
Newave Communications
============================================================ ==========

Re: Second home

"John A. Weeks III" <> wrote in message
news:

> I totally agree. I read a newspaper report about 6 months ago
> about Dane County, Wisconsin, an area that has seen rapid price
> growth. The report said that 95% of first mortgages were no
> money down deals at that time.

That is amazing. What I fail to understand is why so many banks are
approving this practice. Surely mortgage lenders must realize they are going
to lose money because of defaults in the future.