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who determines whether or not you have enough equity to purchase a second home?

I have a mortgage on my current home, I have found a house in an adult community at a good price and would like to buy it using an FHA loan.  Who make the determination of the worth of my 1st home to know whether I have enough equity to purchase other home and then either rent or sell current home?
  • October 28 2009 - Pacific
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Answers (4)

Best Answer

The lender providing the new loan may require an appraisal of your current home in order to establish your 25% equity position.  It may be determined by an AVM obtained by the lender cost will be less.  The Underwriter will make the decision what steps will need to be taken.
  • October 28 2009
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The bank will require an appraisal to be done on that situation and base it on that.

  • November 01 2009
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FHA is a 25% equity position requirement and FAMA is 30% equity position unless I missed a recent change. 
  • October 29 2009
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Carl

Correct me if I am wrong, but I thought it was 30% equity if the income from the rental was used to qualify.

Thanks
  • October 29 2009
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