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Buying new home before selling old home ...

I'm looking to buy in Alexandria, VA (jumbo) before I sell in Houston, TX (~$300k equity and will be sold by Summer) and am told by my existing lender I need +740 FICO (no problem), at least 20% down (no problem), closing costs (no problem), 9 months of reserves for housing costs on both houses (might be $10-$20k short) and a DTI of 43% (I'm just a little bit over on this). Are these typical requirements for buying with a jumbo before selling?
  • December 12 2013 - US
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Answers (7)

It is difficult to answer whether or not those requirements are typical. Every lender is different and some lenders will have more strict requirements than others. It's not that these lenders are trying to rip you off, they just have strict requirements to avoid any risks. On the other hand, there are other lenders out there that are more flexible. So those requirements may not be the same for every lender. Some requirements are standard amongst most lenders such as the 43-45% DTI, but other requirements can very. Well I hope this helps! If you have any further questions or if you would like a loan, feel free to contact me!
  • December 13 2013
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You could always consider a HELOC 2nd that you could pay off once you sell your other home. This could potentially keep you under the conforming limit, which will open up new avenues of loan options and guidelines.
  • December 13 2013
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Will the purchase price be over $780,000? What interest rate on the proposed loan is being used to calculate your debt ratios?
  • December 13 2013
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Hi! You might want to look at a lender that offers portfolio programs - one's where they keep the loan on their books rather than selling to other investors like Freddie Mac or Fannie Mae.  We have lots of options for borrowers who have strong profiles like you do, but fall short in one or two areas by a little bit.  Feel free to reach out and I can answer your questions in greater detail.  Thanks and good luck!
  • December 12 2013
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look into US Bank.   They will go to 45% DTI with 20% down, 50% with 30% down.
They require 6 months reserves on loan amounts under $1,000,000

Because Jumbo loans are typically portfolio products, you will likely see different guidelines from different banks.
  • December 12 2013
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Yes, those are typical requirements but every lender has a little different parameters. I would check with a couple other lenders because with your credit score and down payment I am sure there is someone who would love to do your loan.
  • December 12 2013
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Hi,
Yes, this sounds right in line with what we'd expect to be required for a qualified borrower looking to buy before selling with a jumbo loan. In the past, lenders were more flexible.
  • December 12 2013
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