Investment vs. Secondary home loan?
We want to purchase a small home for my mother-in-law (who is old and we want to live nearby) and we will require a loan. Obviously this is not our primary residence, so we told the mortgage company that it would be an "investment". However, we learned that we would need to put at least 20% down under these circumstances.
We can not do 20% down. Are the terms different if we bought this as a secondary home? Can we legally do this, even though my mother-in-law will be living there?
Any other advice would be appreciated.
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either way you will need some money down and b/c of the recent (current?) real estate crisis banks are requiring 20% down. what other debt do you have? can your m-i-l manage a mortgage if you co-sign? you will still need some money down. is the m-i-l eligible for a usda-rd loan (google 502 loan). seek advice from your mortgage broker...that's the chap you want to help you. how much equity do you have in your home? can you use the equity in your home as collateral?
No matter what you call it you need 20% down. You cannot get an FHA loan for a second home
As soon as it was not owner-occupied, you get hit with the 20% down.