Purchasing 2nd home as an investment for parents - suggestions/advice needed

[Alan Phan]

We purchased our home during covid and we have a chunk in equity, which we do not want to tap into. If we were to sell, we're looking 1.2-1.5mil.

Our situation is we want to purchase another property for my parents to live in - it would be 600-700k condo. We do have enough for 20% down payment. Because this will be considered a 'rental/investment' what do I need to know? Should I approach a broker or lender?

[Erik Estrada]

Quote from @Alan Phan:

We purchased our home during covid and we have a chunk in equity, which we do not want to tap into. If we were to sell, we're looking 1.2-1.5mil.

Our situation is we want to purchase another property for my parents to live in - it would be 600-700k condo. We do have enough for 20% down payment. Because this will be considered a 'rental/investment' what do I need to know? Should I approach a broker or lender?

 Hey Alan, 

Technically this would not be considered an investment since you have a relationship with the tenants. I would structure this as a second home loan. Rates are much more favorable compared to an investment property. 

We would need to verify that you are able to meet the DTI requirement since we will not be able to use rental income to offset the mortgage debt.