Second Home Down Payment

[Olivia Beaucher]

Hi BP,

CO/MA realtor here, Looking to know what down payment is needed for a second home? My husband and I have great credit and great income. Very very low debt. 

We want to purchase a second home in FL. Are we required to put 20% down or is it min of 10% down?  A lender recently told me it was 20-25% without seeing our financials etc.

[Jay Hurst]

Quote from @Andrew Postell:

@Jay Hurst hey man, you can't charge that many fees on a second home.  Those are still subject to the 3% rule.

 @Andrew Postell You are in the business so you know that the LLPA's are paid by both by higher coupons and discount points, NOT just points/fees. That is why I said to do 90% second home you will have BOTH high rate and fees.  As for QM calculation, we are not a broker so comp does not get included in the calculation. And as you know, 2% bona fide discount points do not go into the calculation either. So, the 90% second home is doable, if not terribly appetizing to the borrower.  Alternatively, a first at 70% or 75% with a second up to 90% has a lower LLPA cost which we have done recently a few times. Works great for some borrowers who have plans to pay off the second lien in a short time.