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Anyone have experience with two mortgages between two houses?

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Anyone have experience with two mortgages between two houses?

So this is somewhat of a longterm goal for me. and this post is more about me dreaming than anything. I'd like to buy a second home. I know the easiest way is to simply pay off one first or to just save up enough cash to buy the second property outright.

 

Has anyone on here ever held a mortgage on a property for many years building a really strong amount of equity and then purchased another home with a mortgage?

 

I have a VA mortgage fixed 3.75 with 28 years left. I'd like to work on getting it down to a 15 year loan and build equity faster while at the same time saving for a down payment on a second house. I wonder if I shouldn't stress about trying to get equity and invest more money instead.

 

Hyopothetical assumeing my DTI is within limits and credit score excellent. If I was to pay my cuurent mortgage down to 120k and refi for 15 years would I then be able to put 20% down on a new property and take out a 30 year loan for 300K? 

Message 1 of 4
3 REPLIES 3
Valued Member

Re: Anyone have experience with two mortgages between two houses?

Are you talking about having 2 VA mortgages or 2 mortgages in general? I currently have a mortgage for a property that is now an investment property. I will hopefully be closing on my new house tomorrow with a mortgage. The first mortgage is conventional and the 2nd is VA. In general, you can have multiple mortgages as long as your overall DTI supports it. But to use the VA loan multiple times, you must have enough VA entitlement benefits to cover both loans or be willing to cover the difference with your own money.

Message 2 of 4
Established Contributor

Re: Anyone have experience with two mortgages between two houses?

In my opinion there really isn't any need to pay down the principle on the first mortgage--especially with that low rate.

 

Just focus on saving money for your second home and the down payment amount you need is merely 10% of the purchase price.   

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Licensed NC Mortgage Loan Originator
Message 3 of 4

Re: Anyone have experience with two mortgages between two houses?

I think it might be nice to have two VA loans. I probably wouldn't qualify or even want to buy a second home unless I could put down 20% anyway so I probably wouldn't see much advantage. I think I'll work on growing my savings for this probably with a Roth IRA. I think I'll also take advantage of refinancing my current loan back to 30 years to try and get a lower payment, but only if the option to refi at 3.75% or less happens in the next few years. Dropping a couple of hundred dollars off my payment would help my DTI for another loan. 

 

Its nice to know it's possible. I'd like a second house back in New England where I grew up. So I day dream about it often. It'd probably take me about 15 years to pay off my current mortgage. I like the idea of having as much debt as possible tied up in mortgages though with the rates as low as they currently are.

Message 4 of 4
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