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I want to know as much as I can.

First say for example I am approved for 100,000 just to make the numbers easy. Can I get 2 homes for 50,000 each. (Please don’t think this is stupid. I geniunely want to know). Perhaps not on the same loan… but is it likely to be approved for 2 smaller loan amounts at the same time. Also, if that is not true. How soon after buying the first home can I be approved to buy a second home? What type of down payment percentage can I expect since they will be investments. (They want 5% on a single loan as primary residence).

How does it work to use rental property income as your income? I.e. how do you suggest to document it? How long do you have to have the income for it to count?

Finally, in the state of MA in particular, how much do you pay for water? Electric? Sewage? Any other costs?
thanks in advance

4 Thoughts on A few home buying/ownership questions…?
  1. Reply
    October 25, 2011 at 2:58 am

    I don’t think you can buy two different home with the same loan.
    You must visit the site as they really provide best financial planning services in MA.

  2. Reply
    john j
    October 25, 2011 at 3:56 am

    No you cannot. The approval is based on not only your income and net worth, but also on the total debt. But banks also look at other abilities to repay. In your case, it appears as if you will be using at least one of the houses as an investment. Therefore, this is risky, especially in this economy. You will need to tell the bank you want to be approved for 2 seperate properties. While they may approve you, they will definately reassess your ability to pay and match it with the hypothetical risk of default.

    There should be no time delay in getting approved for the second loan. The key is your financial profile. Expect to pay 10%-20% down if you have a very good financial profile.

    Rental income is counted as ordinary income in the year it is earned. Sorry I do not know whatthe fees are for water, sewage, etc. Those rates are different for every city. Check with the city you plan to purchase in, maybe the Chamber of Commerce.

    By the way, I’d be very careful about buying any real estate in this market. The bottom is not even close. Do not listen to the clowns who continue to lie to restore confidence. They have all been wrong and continue to drag their feet. Real experts expect real estate to decline much more, although that does not mean there cannot be good buys now. Just be very careful and stingy with your cash. Cash is king and you as the buyer are king. Sellers have no power. Get a good book that really details the full extent of the bubble. The best I’ve read is “Cashing in on the Real Estate Bubble.” Good luck!

  3. Reply
    October 25, 2011 at 4:42 am

    Your loan approval is for an owner-occupied residence. Other loans will be required for income property; a 25% down payment is typical, and the property will need to show a positive cash flow in order for it to be financed.

  4. Reply
    October 25, 2011 at 5:04 am

    In order to be able to purchase the second property right away, your total debt as a percentage of your total income (debt to income ratio) will have to be within the lenders guidelines. Generally lenders require a 10% to 15% down payment on an investment property, but guidelines vary from lender to lender. You may consider purchasing a duplex that will allow you to become a homeowner and a investor at the same time.

    I recommend that you work with a Realtor in the community that you are looking at. is the official website of the National Association of Realtors and you can search for a Realtor by zip code.

    Once you have selected a Realtor, he/she can recommend a hand full of lenders that can assist you with financing. They will also be able to tell you about utility costs, what that particular market is doing (i.e. if the market is currently appreciating, stable, or declining.) and be the best source of information in the home buying process.

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