To get approved for a second mortgage, you'll likely need a credit score of at least 620, although individual lenders' requirements may be higher. Also, remember that higher scores correlate with better rates. It's also likely that you need to have a debt-to-income ratio (DTI) of less than 43%. When buying a second home, you'll likely need additional money in reserve to cover your mortgage payments if you have a temporary loss of income.
Well-qualified individuals are likely to need at least two months of reservations, while less qualified applicants may need at least six months of reservations. One month of reserve funds should be enough to cover the monthly mortgage payment for both homes. A second mortgage is a form of loan in which the collateral is your home. You can take out a home equity loan to get the money you need for major expenses or major purchases.
