Why is buying a second home nearly impossible?
 

I apologize in advance, just venting right now.

I'm in the process of (at least I thought I was) of doing more than just owning a boat in a marina on Lake Winnipesaukee. Don't get me wrong, I love my big sailboat, love the marina, but it's time to find a condo. Figured I wanted one with a water view and either on the beach or a 500' walk... I found some.

"Great!", I say to myself.

Call around about a second loan. Wells fargo, Merrimack Mortgage, etc... All want 20 to 25% down on the purchase price, not the value, on the purchase price.

So a $250,000 condo purchase, I would need ~ $60,000 minimum down on it.


No wonder places are taking a while to sell. I suppose my next step would be to look for a lender who would be willing to do it in house? Instead of big banks that are just going to resell it and have these ridiculous requirements.

I could see putting 10% down, as I'd rather not deplete my account 60 - 70k right now. Heck, at that point, I might as well just forget the bank and pay in cash... But I don't want to do that either. I have it tied up in investments that are actually making me money.

Told the wife that I'll probably just end up getting a bigger sailboat in the spring.

Anyhow, sorry for the rant. Fresh in my mind as I get off the phone. Good luck to those buying condos around Winni, and better luck to those selling.

you are right
i would try some local banks liek laconia savings bank or somethign like that, I have not had to do this in a while, but it would seem they would be more understanding of the situation and type of loan

if it were this way six years ago, i never would have been able to purchase our place, and look at that, I make my mortgage payment on time every month, what a thought

20% is pretty standard for a second home unfortunately.

Try Meredith Village Saving Bank. We just closed with them and they were excellent all round.

Deal with a local bank
 

We just closed on a 2nd home with MVSB on the lake and was required to put 20% down, and I believe it to be a banking standard. Definitely try dealing with a local bank, they tend to be more understanding and are willing to work with local customers.

Also the way the real estate market is, make sure you are getting the best possible deal for that new home your looking at. I was patient and put an offer in on our home last year and it was refused by the home because they thought it was worth more. I waited til this spring because it hadn't sold over the winter and put in another offer. You could say he was more than anxious to sell this time and we ended up closing the deal back in May @ 42% below the assessed value. It was definately worth holding out and we saved $$$$$$ and got to enjoy the big lake this summer.:D

Skin in the game
 

One of the lessons learned from the real estate bubble is that folks that don't have skin in the game are more likely to default their mortgage and throw the keys on the table if their home's value declines dramatically. Especially if you are talking about a second home/condo/investment property. BTW, I am by no means suggesting you would do that.

Banks have been soaked enough by deadbeat borrowers who thought buying a home was a joint venture with the bank where they got 100% of the upside and the bank owned 90% to 100% of the downside. That's why the underwriting standards have shifted so dramatically. Simple as that. And a good thing if you think restoring the health of our banks is pretty fundamental to overall economic recovery.

20% down
 

was standard and it is now.

During the RE boom before 2008, i remember banks will allow you to purchase a primary mortgage for a second home if you made the intent that you are going to sell your current home. I knew a number of folks that have two homes with seperate primary mortgage. I bet that created a mess.

Doesn't Washington Mutual, the nation's fifth largest bank with a market cap of about 30-billion dollars, have a small local office in the Fitness Edge building opposite the Meredith roundabout.

Heard that Washington Mutual ...... aka WaMu .....was pretty easy with it's loaning out mortgage money because they do not hold onto the mortgages they write ..... WaMa just turns around and resells them on Wall St ...... or something like that ...... WaMu ..... sort of sounds like a name for a sailboat ....

Thank goodness some sanity has returned to the mortgage market.

A down payment based on the purchase price, not the value, is how it should be. Anyway, those two numbers ought to be pretty much one and the same, if you have a willing buyer and a willing seller, neither one of whom is being forced to go through with the deal and both of whom are fully informed of the market.

Hey wait, what's the name of the infommercial guy who would show you how to buy a house with no money down?:laugh::laugh: Don't see those anymore. Wonder why.:eek:

Well, as luck would have it, my bank came through and sent me my pre-approval letter for a lion's share of the places I'm interested in.

Will bite the bullet and put the 20% down as the prices seem right in many areas.

Looking forward to it.

Sent you an email.

Welcome
 

http://i44.tinypic.com/1499wms.gif hig, I just noticed that you are fairly new to posting on the forum and glad you have joined us. Have fun and enjoy the Winni Forum while making many new friends. I see that you are right into the swing of things logging in your first or second post.:)

http://i54.tinypic.com/2e56yqf.gif

Get used to tight lending requirements as they are here to stay. While the Banks were partially to blame for the real estate mess we are in (politicians and homeowners are the other two major contributors) they have taken about 95% of the blame for the problem since the American public and arrogant politicians refuse to admit their culpability. Plus, faceless institutions like banks make easy targets. Thus, when Banks make new loans they must be 110% certain that they comply with government underwriting standards or hypocrites like Chris Dodd and Barney Frank (two of the biggest proponents of the GSEs and also the authors of flawed over the top banking regulations. How they were able to be on both ends of this mess still amazes me) are all over them with more rules and fines.

In any event, I wish you luck with your transaction.

Let's not forget my favorite Rep:..Maxine Waters, (D) South Central, LA who stated.."This Program is Working Just Fine". (Look for the Youtube Video)

Implied; Anyone who speaks out against this program is RACIST. Case was Closed. NB

Tough to consider a condo an investment.....more of a money pit if you ask me.

Don't forget the Wall Street investment banks that bought, repackaged and sold crappy loans as if they were safe investments; the rating agencies that certified that these crappy loans were safe investmensts; the insurance companies (AIG, anyone?) that created credit default swaps so that the investment banks could protect themselves in the event that these loans that they knew were crappy went south; the mortgage companies that made up and marketed ever more risky loans (interest only, no money down, no doc); the speculators (not homeowners) who flipped homes at an increasingly frantic pace in order to make a quick buck; and the government regulators who were too stupid or lazy (or both) to figure out what was going on.

Plenty of blame to go around.
 

I'm glad you took the plunge and are moving ahead with your purchase. Who wouldn't want to own a piece of the lakes region.... Even with 20 percent down! Congrats!

Read about Bush's first two Treasury Secretaries, Paul O'Neill and John Snow.
It might help you understand better where the Bush administration went wrong in the beginning.
Especially John Snow who in May 2004, it was revealed that Snow's brokers had bought $10 million of debt issued by Fannie Mae and Freddie Mac on the day and day after Snow was sworn into office as Treasury Secretary.
Snow was forced to resign when it was uncovered that Snow failed to pay income taxes on the $24 million of loan forgiveness he received while CEO of CSX Corporation.