Financing for the "Buy" part of B&B

**DaleA** · 07-20-2012, 11:02 AM

I live in Phoenix and I bought my home in 2006 for about $270k with 20% down. I refinanced in Nov 2009 when my remaining loan amount was about 120% of the value of the home. Today I owe about $200k and my house is worth about $140k. I spoke with my mortgage company (Huntington) and they say I cannot refinance at today's rates because I refinanced in Nov 2009, and they won't speak with me about a load mod because I am current with my mortgage payments. Given these conditions, I am considering B&B.

I have spoken with a mortgage broker with whom I did business several years ago, and he says that for the second home, I will need 20 percent down and will have to qualify for both mortgages with my income excluding potential rent on the first house. The second requirement should be no problem as I am looking at a relatively cheap home to buy. My question is - how rigid are lenders about the 20 percent down? Do any of the successful B&B members here have any suggestions for the downpayment?

Any information you can provide would be much appreciated.

**Sanity** · 07-20-2012, 01:01 PM

Hi DaleA,

I went the FHA route to finance my Buy and Bail. Only needed 3.5% down and the monthly DTI ratios to qualify are much more flexible especially when you have to take into consideration both mortgage payments. They recently lowered the cost of PMI associated with an FHA. It is cheaper now than when I did my loan in October of 2009.

Good luck!

**Evan Bedard** · 07-20-2012, 01:41 PM

My question is - how rigid are lenders about the 20 percent down? Do any of the successful B&B members here have any suggestions for the downpayment?

Yes as Sanity mentioned an FHA loan may be your best option because it requires a much lower down payment. If you type in "buy and bail" in the google search bar at the top of the page you will find many others members who have went this route and already obtained financing on their new property..