Profile picture for user318332

What banks will lend on a purchase when there is an upside down overlay on my current property?

I am in escrow, trying to purchase a new larger home. I am upside down on my current home. My middle FICO is 804, my husbands is 698, our DTI qualifies us for both homes, we also qualify for an FHA. The lenders my broker has submitted to will not allow the upside down overlay. We owe $600,000 and current home value is $300,000. Our new home is $519,000. Do you know lenders who will allow this? I am in northen California.
  • August 05 2012 - Staten Island
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

 
 

Answers (6)

Profile picture for user318332
Sonoma County, California.
  • August 06 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Go Huskers
You still have not said what county this is yet. I am asking because if you are in a county where the FHA limit is high enough, this will be very easy to do. The limit is no necessarily $417,000. FHA will allow this and all you need is a lender that can do an FHA mortgage. 
  • August 05 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for user318332
Our purchase price is $519,000 and we are putting $20,000 down. Part of the reason our down is so samll is so that we will have reserves covering 6 months of mortgage payments on both properties. So we have the income/DTI, we have the reserves, and we have the FICO. We are just majorly upside down and even though we've never had a 30 day late, the bank is assuming that we are going to bail. Not sure what to do. Just wondered if anyone out there was aware of a bank that is OK with this scenrio??? We've got until August 16th to get a bank approval.  
  • August 05 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Go Huskers
Well all true jumbo loans are portfolio loans so they don't follow conforming guidelines. What is your new loan amount and what county are you purchasing in?
  • August 05 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for user318332
We have submitted a letter of expalnation. So far 4 banks have said no. My broker said it's because we are applying for a Jumbe loan. If we found a house for $417,000 or less the banks would not balk.
  • August 05 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for Go Huskers
If you can afford both properties and your DTI is acceptable, the fact that you are upside down should not be an issue. At most you should only need a letter of explanation as to why you are purchasing the new property. 
  • August 05 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.