buying a second home as a primary residence

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dogerfan

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Post Posted: Fri Mar 13, 2009 9:23 am    Post subject: buying a second home as a primary residence
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I currently own a home. I am buying a new home which will become my primary residence. With the income and dti ratios I qualify for both homes. My FHA loan is currently in the process of being underwritten. We gave a LOX when we submitted the loan package for why we are moving to the new home. Also I have a mid 740 credit score and no late payments. Do you see any problems with getting the loan approved.
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Icon Mini Profile gmakerley
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Post Posted: Fri Mar 13, 2009 2:49 pm    Post subject:
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there's too few details to tell you that you're good to go, but if you wrote a nifty letter that explains all, then i'd think you'd have a reasonable shot at this. the key is making sense, so if you meet that requirement, that ought to do the job.
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dogerfan

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Post Posted: Fri Mar 13, 2009 3:37 pm    Post subject: second home
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Primarily my concern is being subjected to a buy and bail scheme which is not what I am attempting to do. I plan to rent my previous home and live in the new one. So we wrote a LOX explaining why we want to move across town about 40 miles away from our existing home....closer to school, work, friends, family. Other than that I have no concerns about the loan going through. I just know that underwriters are looking for people that are trying to scam the system and I don't want to be declined for a loan because of others bad behavior.
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Post Posted: Fri Mar 13, 2009 7:23 pm    Post subject:
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Hi dogerfan!

Welcome to forums!

If you have explained your situation properly in the letter, then I don't think the lender would reject the loan. You will have to convince the lender about your situation and make him understand that you have genuine reasons to leave the present property and move to a new one. If the lender is convinced, your work is done.

Feel free to ask if you have further queries.

Sussan
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Post Posted: Fri Mar 13, 2009 9:13 pm    Post subject: Also...
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Along with the letter, your solid credit rating will help as well. If you have no negative history that will lend credibility to your letter.

Sounds like you should be in good shape, but that was a great thought and valid concern.

Best of luck!

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Icon Mini Profile gmakerley
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Post Posted: Sat Mar 14, 2009 4:48 am    Post subject:
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dogerfan, you aren't going to be given credit for rental income on the home you're vacating unless you have substantial (30% or more) equity in that home. 40 miles isn't an ordinary relocation situation, so your explanation letter must be extremely well spelled out, and you're going to have to qualify for this new loan while still holding your current home with the full payment. if that all can work, then you ought to be able to move forward as you desire. if not, that can cause you some severe difficulty.
and i agree that it's too bad that some have to suffer for the sins of others, but at the same time, there was a lot of risk taken in the past and sensibility is actually returning to the mortgage market, though some of it is definitely overkill.

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dogerfan

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Post Posted: Sun Mar 22, 2009 9:30 pm    Post subject:
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We received our Final approval from the underwriter and loan docs are being sent to the title company. Also we have found a renter for our existing home.
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Post Posted: Mon Mar 23, 2009 6:40 am    Post subject:
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good for you dogerfan. i wish you well.
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Post Posted: Tue Mar 24, 2009 9:06 am    Post subject: dogerfan
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Which lender did you use? We are in the same situation, but the lender is slow! We relocated and the house was too small for our belongings, found a better situation, 788 credit score and adequate income for both mortgages. Purchase is appraised at 5% greater than contracts...want to close yesterday..Have renters in the home at this time and early occupancy where we are, but very frustrated that they can't seem to close a loan in less than 8-10 weeks because they are "busy." We applied in Jan. with pre-approval, made offer in JAN.
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Post Posted: Tue Mar 24, 2009 9:14 am    Post subject:
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it's been a very busy time for a lot of lenders. what it comes down to is dedication and determination. if a lender wants to get a deal done in a specified timeframe, it can be done. what it takes is a commitment on the part of management to ensure that borrowers' needs are met.
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Skywalker

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Post Posted: Sun Mar 29, 2009 7:20 pm    Post subject: Similair to Doger Friend
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We are experiencing the same type of problem. We were recently, 1.9 months, have scores of 800 and 760, make about 199,000 a year and a VA gaurantee. They mortgage company we are currently working with says both are incomes cannot be used because one of us has a loan on an existing property which does not meet 25% of the value. Is this requirement law? It appears I will meet the capability for the loan independently but find this to be a bit restrictive. It also appears this type of restriction will continue to drag the market down as more and more of us have been increasing our savings accounts and do not want to have to sell current properties in this market. Which again would have to be at a reduced amount further dragging the values down. Thanks for any insight as to the requirement being law/legislative in nature.
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Post Posted: Mon Mar 30, 2009 2:40 am    Post subject:
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Hi Skywalker

Do you want to refinance the property? If you want to refinance the property, you need to have equity in the property. If there is no equity in the property, lender's won't offer you a mortgage. If you meet all the eligibility of getting a loan, then you should go for it alone.

Thanks.

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Post Posted: Mon Mar 30, 2009 7:16 am    Post subject:
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skywalker, i don't quite comprehend what that lender is trying to tell you about this 25% issue.
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marissa

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Post Posted: Tue Jun 02, 2009 1:16 pm    Post subject: renters credit
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I am also looking to buy a second home however we don't qualify income wise for both propertys. We already have our house rented out but the loan officer said something about waiting six months so we can have proof of six months of renters. He said we would need cancelled checks however our renter does not have a checking account and was going to pay us cash. So I guess the question is how else can we prove the rental besides cancelled check? Hope this all makes sense. Thanks
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Post Posted: Tue Jun 02, 2009 1:59 pm    Post subject:
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am i safe in thinking that marissa and skywalker are the same person? it seems so.

i suspect the 25% thing, on further reflection, relates to your leaving your current primary residence while renting it out to take on this new property. yes, there is an issue with doing that. is that what it might be about?
your tenant ought to pay you with money orders or bank checks to make that loan officer happy, but if you maintain quality records (receipts, etc.) and make timely deposits of the funds you receive (so that you can document receipt), that ought to be enough to make them happy. again, the waiting period discussed is probably related to your vacating a current primary residence to make this new purchase. ask that specific question...you seem to be getting vague answers.

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