I have a borrower who is a medical Dr. and he has a practice in Globe Arizona and Mesa Arizona. He lives in Globe AZ right now with his family but wants to buy a home in Mesa AZ close to his practice in Mesa. What is the best way to do the loan? What will the underwriters consider the Mesa home in regards to occupancy? Will they consider it a 2nd home or Investment property?
Answer: We can do it as a 2nd home. Globe and Mesa are about 70 miles away from one another. He will be buying a $350,000 house in Mesa, which makes sense. If the Dr. said he was buying a 2nd home in Mesa and it was worth $70,000…that would be a problem. Underwriters would typically red flag that and require it to be tagged as an investment property. Also, the good news is that interest rates on a 2nd home are the same a primary residence.
I have a new borrower who wants to buy a $70,000 investor property in Phoenix, Arizona. Will this loan be approved based on the scenario below?
The borrower has been working for the same company in Williams AZ for 10 years
The borrower has 2 rentals
He recently rented (April 2011) the house he used to live in up in Williams. So, his 8 year primary is now a rental.
He also purchased a retnal home in Phoenix in March 2011 and it is free and clear.
He has been staying at a KOA (RV camp ground) since April 2011. So…he has no physical address up in Williams.
The borrower has 6 months of reserves in a 401K for all properties (the 2 rentals)
Answer: Not as it currently is. He will need to move into a rental and be established at a legal residence for 2 months to get a conventional loan. A borrower cannot be living in a camp ground or anything that doesn’t establish verifiable residence.
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Signature Home Loans LLC does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Signature Home Loans NMLS 1007154, NMLS #210917 and 1618695. Equal housing lender.BACK TO LIST