when purchasing an investment property is it better to use an equity loan or a new mortgage loan?

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looking for the best interest rate for a second property

I am co-signing on a loan with my son (I am the primary borrower; son could not qualify) his name will be on the title and he will occupy the condo and make the mortgage payments. The unit sold for $ 254K; I’m putting $ 100K down. Why can’t it be considered “owner-occupied” when my son will be living in the unit and is on the loan and the title? Should I shop for other lenders or will this be the case everywhere?

3 Comments
  1. Reply
    Closer
    February 15, 2011 at 3:03 am

    Honestly, there is no simple answer. It really is going to depend on you and your personal situation. As an investor myself, I’ve found the need to do it both ways depending the current status of my real estate portfolio at the given time. You really need speak with a professional and go over your finances and current equity position in order to give you a more accurate answer to your question.

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  2. Reply
    loanmasterone
    February 15, 2011 at 3:16 am

    That question is answered when you completed your loan application. There are several questions about occupancy.

    #1 Is this your primary house?

    #2 Is this an investment property

    #3 Is this a second home

    There might be a few more on the mortgage loan application, but those are the primary ones I can think of at present.

    You should have checked one of the choices with the help of your mortgage loan officer.

    If you currently own a home as your primary residence then this property would have to be an investment property or a second home.

    If you selected a second home then this second home can not be 3-4 blocks away from your current primary home.

    Therefore the only logical choice is an investment property. This will be the case no matter with whom you apply for a loan with.

    I hope this has been of some benefit to you, good luck.

    “FIGHT ON”

  3. Reply
    Iffy
    February 15, 2011 at 3:44 am

    Because you are not living in it, you are making the down payment Your son has no equity in the unit. To do it otherwise your son would have to pay taxes on that gift of 100k

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