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Curious About Purchasing A Second Home. I Own A Townhouse That, At Today’s Value, Has No Equity.?


The townhouse is near a college and there is no doubt I will be able to rent it out. I have several friends that want it. I have been employed with the same company for 12 years, have 2 vehicles, 1 that is paid off, and the other (which I purchased for my daughter) has a payment of 232.00 per month. I have 2 credit cards, none of which have balances. I pay cash for everything but have no savings. I do have a 401K. What are my chances of obtaining a loan for a second house? Who do I contact? Where do I start?

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2 Responses to “Curious About Purchasing A Second Home. I Own A Townhouse That, At Today’s Value, Has No Equity.?”

  1. 2
    Dan B Says:

    I was in a similar situation. Had no problem qualifying. It will be based upon your credit history AND your income to debt ratio. Is your income high enough support a second home mortgage?
    Contact a real estate agent or mortgage broker. Get yourself pre-qualified for a mortgage. When you are pre-qualified, it almost guarantees that you will get the loan as long as you don’t take on additional debt or change your credit profile. This doesn’t commit you to a loan, it just determines how much you can afford. Then you won’t waste time looking at homes that are beyond your budget.

  2. 1
    Big Deal Maker Says:

    No home equity is fine. No down payment in today’s market problem. I would recommend a class for property management to show the bank you are serious about the rental first. After they see you have the experience they may loan on that criteria.

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