2nd home/vacation mortgages available at 10%?

Question

I'm in discussions to buy a second home/investment property in Vermont. My lender just called me quite flustered to say that he has learned that no one is doing the traditional 10% down loan for second homes, which is what I was going to use. Is this true? Does anyone have different information?

Thanks, David

Dave Skow · Answer

@David N.- consider  buying as 1 unit  inv proeprty with 15% down

Wesley I. · Answer

@David N.

I was able to do this with Wells Fargo back in 2022. Different times today, dont know of any banks who do 10% down anymore.

Armando Carrera · Answer

Hey Jeremy,

Do you think we'll see 10% down again?

Jeremy Holden · Answer

Im an agent and investor in scottsdale who has used 10 down for myself and clients. 10 down used to be super popular before March of 2022. Rate were low, prices were cheaper and it was a great way to use a secondary home loan to buy a rental, long term or short term, especially in the phoenix / scottsdale  / az market. The government saw the housing bubble and changed guidlines with fannie and freddie to make the 10 down / 2nd home loan product very expensive (about 4 points to close). Those points have now come down so we're seeing more folks in az using that program to buy from out of state.

Armando Carrera · Answer

I was hoping to purchase another investment home with 10% down (since we did that years ago in AZ) but lender explained that is no longer possible. Basically why they did that was to deter investors from purchasing locally. Many investors were easily putting 10% down and taking up many of the homes for sale. Lenders (maybe even the state), wanted to give locals a chance to purchase their home.

I dont see a problem with investors needing to come in with 20% down. Less leverage for us.

Chris Seveney · Answer

@David N.

20% is minimum I am seeing

Raymond J. Rodrigues · Answer

10% down second home loans still exist. They do not allow you to use potential rental income that will be received from the property via STR, to qualify, but will still allow you to purchase with low money down. Other option is 15% down as an investment property for single unit properties.

Melvin List · Answer

I would maybe try and broker in your area. They should have access to a 10% down mortgage loan for a second home.

Jeff Chisum · Answer

Sorry I didn’t see this sooner.  I have a unicorn 10% down product that is not Fannie and Freddie so does not have the loan level pricing adjusters that others have mentioned.

2nd home/vacation mortgages available at 10%?

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