Updated over 10 years ago on . Most recent reply
Investment Convential Loan Requirements
Hello,
I joined the site today and after reading the getting started materials I am taking the advice and asking a question to the user community.
My wife and I applied for and received a “pre-approval” letter from a direct lender for an investment property.After finding this website and reading materials here it’s obvious we are not ready to purchase at this time but I would like to solidify finances.
We applied for a 300K loan and the application specified a 15% down payment would be required for an investment property.When I received the pre-approval letter it stated 20% down (60K) and six months reserves for the new property.We are short on these requirements by 15K or so which bring me to my questions;
If we take a second mortgage on our primary residence and place the funds in savings, does that meet the requirement? (notwithstanding effect of income-debt ratio )
If so, can we just apply for a HELOC or will we need to fund a traditional second mortgage? We would prefer not drawing funds until they are needed.
Thank you and any clarification would be appreciated.