Is my mortgage broker right? I won't qualify for 2nd home? Why?
My wife and I purchased a SFR in San Diego, CA in 2015 with an fha loan. Appreciation has been great and I've refinanced out of that loan to a conventional loan and opened up a HELOC with 58k available.
We want to move on to a new place but keep our current home as a long term investment. We view our current property as a long term hold for several reasons.
We want to grow our portfolio and have identified a couple duplexes or even smaller single family residences in better neighborhoods, but my lender has told me that I won't qualify for fha or lower than 20% down programs because it won't make sense to the underwriter that we are moving to a smaller place. We're looking at places between $550k - $625k.
In the case of the duplex she said I would not qualify because they wouldn't be convinced that we would live in one and rent the other. Additionally there would be some hurdles using the rental income from my current home towards my dti since I would be using the heloc for the down payment on the new place.
I don't understand the logic. Besides the fact that we actually are going to live on the property and not just use it as a rental, doesn't it make sense that people would sacrifice square footage for a better neighborhood, better school districts, less commute, better quality of life...etc?
Has anyone else had a similar situation and been able to purchase the 2nd home with owner occupied financing? How did you do it?
Do you have any advice or insight?
I'm trying to get my brrrr on but they're not making it easy!!!
I would greatly appreciate any feedback.