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Answers (14)
Best Answer
- Sean Ogilvie, "California Mortgage"
- Contributions:173
You would need to be able to cover all housing payments plus your consumer debts to qualify. Right now, your debt to income ratio is 41% which doesn't leave much breathing room to add an additional mortgage plus taxes and insurance on a new property.
If you can get your debts down to 3250 that would certainly help. If you could accomplish that it would give you enough room to qualify for a home priced not much higher than 225K with your 15k down. Your new home would need to be your primary and if it is located within close proximately to your current home be prepared to have good reasons for moving, i.e.the larger house for your growing family.
You will also want to save as much as you can for reserves. You will have to carry both mortgages and will not be able to count any rental income as qualifying income from your departing residence due to your lack of equity. By paying off even more of your debt and saving more towards the down and reserves you will increase your purchasing power.
Good Luck to you.
If you can get your debts down to 3250 that would certainly help. If you could accomplish that it would give you enough room to qualify for a home priced not much higher than 225K with your 15k down. Your new home would need to be your primary and if it is located within close proximately to your current home be prepared to have good reasons for moving, i.e.the larger house for your growing family.
You will also want to save as much as you can for reserves. You will have to carry both mortgages and will not be able to count any rental income as qualifying income from your departing residence due to your lack of equity. By paying off even more of your debt and saving more towards the down and reserves you will increase your purchasing power.
Good Luck to you.
- Matt Baker, "bakermortgageteam"
- Contributions:25
You need to talk to a mortgage professional that some flexability with having current property in the same city you want to buy a new home in. I ccan help. Reach out to me so I can run some numbers and talk specifics in your scenario. Thanks
- lostlady
- Contributions:2
Thanks to all your replies. I think the most sensible way to do is to wait until next yr to buy a new home. Pay all our cc debts and start saving money for down payment.
As tempting as it is to do a short sale or "walk away" from our current obligations, but we just can't justify that we are in hardship. We also don't want to ruin our excellent credit.
It's also a good idea to get a local mortgage consultant and or a mortgage lawyer on board. If you know of a reputable consultant in mesa, az let me know.
Until then, I will continue dreaming about my new home. Thanks to you all.
As tempting as it is to do a short sale or "walk away" from our current obligations, but we just can't justify that we are in hardship. We also don't want to ruin our excellent credit.
It's also a good idea to get a local mortgage consultant and or a mortgage lawyer on board. If you know of a reputable consultant in mesa, az let me know.
Until then, I will continue dreaming about my new home. Thanks to you all.
- Alan Grizzle, "Alan Grizzle"
- Contributions:401
If you are upgrading you should save more on the buy than you will loose on the sell of a smaller house. You should sell the one you are in even if you have to bring cash to the table to close.
If you pay $50,000 to close and save $75,000 when you buy you are $25,000 to the good.
If you pay $50,000 to close and save $75,000 when you buy you are $25,000 to the good.
- Scott Harward, "AZLoanProScott"
- Contributions:8
If your intent is not to bail on the current home then you may be able to purchase a new home if you can qualify with both payments, if your current loan is a conventional loan and you do the new loan as an FHA loan, and you would have to qualify for the new FHA loan based on credit, debt ratios, required assets to close, etc. AND, you would need to have a strong motivation letter for the reason you are moving. Increase in family size is one example.
In addition FHA does permit loans to borrowers whose credit history indicates a short sale, provided all of the following conditions are met:
1) Credit report must show the short sale and there must not have been any mortgage lates for any of the preceding 12 months from the short sale date.
2) The borrower must have a mid credit score above 640.
3) The property cannot be within the same neighborhood and there must be a strong motivation for the move, it needs to make sense.
In addition FHA does permit loans to borrowers whose credit history indicates a short sale, provided all of the following conditions are met:
1) Credit report must show the short sale and there must not have been any mortgage lates for any of the preceding 12 months from the short sale date.
2) The borrower must have a mid credit score above 640.
3) The property cannot be within the same neighborhood and there must be a strong motivation for the move, it needs to make sense.
- Rudi Hofmann, "LUXURY HOME LOANS CA"
- Contributions:7435
Even if you can qualify with both payments, you'll be hard pressed to find a lender for a new purchase, since you have negative equity in the home you wish to vacate. Most lenders will look at the as a "Buy & Bail."
Happy funding, Rudi
Happy funding, Rudi
- Robin Armstrong, "Robin Armstrong"
- Contributions:152
What is the current value of your home and how much do you owe? Maybe you can refinance to a lower rate. If you have a Fannie Mae loan you may be able to refinance to a lower rate even underwater.
- Gloria Giacinto, "propertyhappy"
- Contributions:10
I agree with Daniel. Your best bet is to buy a house in which the seller will finance. There are many out there and you won't have to worry about your debt or your credit. All you will need is to be able to afford the payments. There are many owners out there who find it difficult to sell in today's market because there are so many homes out there, so some savvy owners have adopted this concept which works for everyone. My only other suggestion is to use a company who is familiar with this process and can guide you in the right direction.
- Jerry Cecil, "Jerry Cecil PLLC"
- Contributions:53
This is a mortgage consultant question. The advice you recieved from Sean Ogilvie below is probaly the best advice here. From my perspective, you will need to take care of things with your first home before you move on to another. FYI, short selling any home requires proof to your lender that there is a reason why you can't fullfil your original promise to pay (ie. a financial hardship). I am a short sale specialist, let me know if you have questions. Good luck to you and keep seeking the best advice you can find.
- Georgina OBryan, "GOBryan1"
- Contributions:483
What your planning to do is not looked kindly by the banks and you can end up with a foreclosure instead.
My aunt has friends that did just that. Bought another property in another state and then stopped paying their mortgage on the one they had lived in thinking the lender would allow them to Short Sell. They even found a Buyer and everything. Needless to say, the Lender rejected the Short Sale outright because they were stratigically trying to get out of their mortgage and not because it was a hardship situation or else they wouldn't have been able to purchase a second property. The lender also rejected a Deed in Lieu for the same reason. In can be considered fraud to do that as a matter of fact. In the end, the lender is foreclosing on that property.
You can not morally get out of a mortgage that you agreed to unless you are truly going through hardship and with the lender's permission. Anything else can be considered mortgage fraud, if I'm not mistaken and can get you in deep water.
My aunt has friends that did just that. Bought another property in another state and then stopped paying their mortgage on the one they had lived in thinking the lender would allow them to Short Sell. They even found a Buyer and everything. Needless to say, the Lender rejected the Short Sale outright because they were stratigically trying to get out of their mortgage and not because it was a hardship situation or else they wouldn't have been able to purchase a second property. The lender also rejected a Deed in Lieu for the same reason. In can be considered fraud to do that as a matter of fact. In the end, the lender is foreclosing on that property.
You can not morally get out of a mortgage that you agreed to unless you are truly going through hardship and with the lender's permission. Anything else can be considered mortgage fraud, if I'm not mistaken and can get you in deep water.
- S. Chris Webb, "PHX AZ RE BROKER"
- Contributions:411
Advice to Short Sale your house is irresponsible without knowing the complete details of your situation, your debt/income etc. Short Sales can destroy your credit, (depending how your lender reports it) reducing your ability to get a loan. You should get the advice of a real estate attorney, and talk to a loan officer and explain your entire situation, and go from there. What to do with the house you're currently in - have you considered renting it out if you do manage to qualify for a loan on a new home? If you can show a lender that you will be making positive cash flow off of it (extra income), it just might help you qualify for a new loan. Just a suggestion.
Best of luck to you.
Best of luck to you.
- wetdawgs
- Contributions:26854
Sean's answer is sensible.
The suggestion of another of "walk away" and "short sale" do not support your goals in the least.
The lending climate at the moment is not very favorable to buying a second home when the first is underwater because it isn't unusual to see a default on the first home.
If you had a >20% downpayment for the second home, your chances would improve. "thousands of dollars" doesn't mean much to me as I don't know if your target value is $100k or a million.
The suggestion of another of "walk away" and "short sale" do not support your goals in the least.
The lending climate at the moment is not very favorable to buying a second home when the first is underwater because it isn't unusual to see a default on the first home.
If you had a >20% downpayment for the second home, your chances would improve. "thousands of dollars" doesn't mean much to me as I don't know if your target value is $100k or a million.
- Daniel Reynolds, "Broker Executives"
- Contributions:355
Your best bet is to walk away from your current home and buy a seller carryback. Let's face it, the bank will not reduce your rate with your DTI being so low which leaves two options. Walk away or try and short sell it. Once you've decided, you'll need to find a seller carryback. Call or email with questions and good luck.
- Randy Hooker, "GoingForIt"
- Contributions:395
Your best bet is consult with a local, reputable mortgage lender and perhaps an attorney, too. Your situation is WAY too complicated for a response on this forum. If you want or need the names of a good lender and attorney, please feel free to email me from my Zillow profile.
looking for best advice : buying a 2nd home
Do you think we can qualify to buy a 2nd home with excellent credit, income: 131,000/yr. monthly expenses; $4,500 (this includes our house payment of 2500). We plan to pay off all our credit card bills and that will reduce our monthly expenses to $3250. Our ideal plan is to get rid of our current home and buy a new one, but with 2 mortgages, only the primary bank will work with us to reduce rate. Just like the rest, we are under water on our current home.
We plan to make our 2nd home - our primary residence -looking for a bigger home. Don't know what to do with the current home. Any suggestions?
Down payment now? maybe 15k. If not possible, we will wait for 1yr to come up with a better dp (60,000 is possible) Any suggestions???? or can we qualify to buy a new home and how much we can afford? thx
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