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Want to buy a house and rent mine out. but banks say I have not qualified for ltv 85%

I want to keep my house and upgrade to a larger home. I have never been late on my mortgage and have some equity, not much do to the drop in the market. I tried to qualify but everyone keep saying that I don't qualify because of my loan to value ratio... I would have to quality for both mortgages, What can I do to be able to keep my existing home? without having to get a job and wait 2 years. My husband makes plenty to cover the new and we would rent this one for more then our mortgage because our mortgage is so low.. PLEASE HELP   ANY IDEAS?
  • September 26 2012 - Rocklin
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Answers (7)

Best Answer

This is a strange one but I would love to help clear it up for you. They are saying you won't qualify because of the LTV on the house you are trying to buy, or the LTV on your current house? Also, what sort of loan are you applying for (Conv, FHA, VA, etc)?

It is true that if the LTV ratio on the house you are vacating and intending to rent out is too high (70-75%, depending on the type of loan you are applying for) you can not use the future rental income to qualify for the new home. In this case you do have to qualify for both your current and new mortgage payment to buy another home.

However that has no bearing on the LTV you will qualify for on the home you want to purchase. 

Please let us know so we can clarify for you.

Sincerely,
Greg

Innerwork Mortgage
Roseville, CA
  • September 26 2012
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Profile picture for BellaAnderson
i totally agreed with Nan Brennan 
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  • November 03 2012
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Unfortunately, in most situations, under today's rules you will have to have your current home appraised if you need to use future rental income on it to qualify to purchase your next home. You will have to have at least 25 or 30% equity in the home in order to do this.

If you would like to talk about your situation a little more specifically please feel free to give me a call or e-mail. There might be a better way to look at this.

Sincerely,
Greg

Innerwork Mortgage
Roseville, CA
  • September 27 2012
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I live in my home but would like to keep this one and buy another.. My mortgage is 1647.00mo. 233K loan balance,  and I believe the appraisal would be around 285K. The lenders are telling my I can't purchase a new home and keep this one without adding  the two mortgages together. We have more then 80% LTV ratio duing that. My husband is the main income, and we cannot cover both mortgages, but definately can rent my current home for 300 more a month and definately afford a new mortgage.

How do I or purchase a new home, rent this out, and only qualify for the new loan? What can I do?
  • September 26 2012
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Profile picture for Ofe Polack
If you have only apply for a loan with one mortgage broker, try applying to another or even a credit union.  If they all tel you the same thing, then they should also suggest what you can or should do to achieve your goal.  good luck!
  • September 26 2012
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I'm sure there are some lenders here who can help you. If you don't hear anything,please let me know and I would be more than happy to refer you to some lenders in your area.
  • September 26 2012
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I dont quite understand your question but here are a few ideas.
1. get a one year lease signed, that way you can prove you have the income to cover that payment.

 You probably dont have enough equity on that home.

2. Why isnt your husband on the loan application (or is he) so you have the income to qualify for a second home. 
  • September 26 2012
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