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ordon46230
32 Posts |
 Posted - 04/30/2008 : 1:19:13 PM
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Prospect is looking to buy a new primary residence, but currently holds a mortgage. What would need to be done to get the lender to approve a new primary purchase, while still holding a mortgage?
Would it be a good idea to have him post his home on the market? Create a lease rental agreement? or wait till he has a signed sale agreement?
**Prospect can't hold two mortgages DTI to high 65+.
FICO 620
Full Doc W2 - 65K
Any advice?
Thanks,
Joe~
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clos
95 Posts |
Posted - 04/30/2008 : 1:31:20 PM
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Will he be buying a bigger home?
How far is the new home from his current home?
You basically need a good explaination as to why he is purchasing another home and why it will be his primary home. Is he downsizing? upgrading? kids off to college? etc etc.
overall, its got to make sense
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djorge44
1184 Posts |
Posted - 04/30/2008 : 1:33:21 PM
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| DTI is going to be a bigger issue. what is he really doing with other home, selling, renting, letting the bank take it |
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mganovsky
1415 Posts |
Posted - 04/30/2008 : 1:34:20 PM
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You have 2 options if the DTI is too high.
1. Lease the property out, and you can use 75% of the lease amount to offset the payment. ( I would play with the 1003 first to see if it would work) and bring down the DTI were you can get an approval.
2. Place the property up for sale with a realtor and have it placed in the MLS, then do a Bridge loan and the property would not be cumputed into the over all DTI. ( but your client will have to sell the property)
If leasing the property out will not work or if he does not want to sell the property, move on to the next one. |
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slants
3736 Posts |
Posted - 04/30/2008 : 1:39:26 PM
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| If the new property is not an upgrade - higher value, larger ft' w/ higher room count and closer to work, etc. the likelihood is it will be countered to NOO and underwritten as an investment property at lower LTV. Lenders have cracked down on the rampant fraud of investment properties being passed off as primary. The unfortunate side effect is that even people who are truly downsizing and buying a new primary residence have trouble documenting such to the underwriters. |
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no1doesbetter4u
11 Posts |
Posted - 04/30/2008 : 1:45:50 PM
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| you can do what mganovsky said which is what I would have said and you can also add a person to the loan and not title to give you more income. There are quite a few things that will give you more income. You can also make that a second home and use a lease that will give you enough 75% income to decrease the dti. you have to play with the numbers |
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slants
3736 Posts |
Posted - 04/30/2008 : 1:52:26 PM
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quote:
Originally posted by no1doesbetter4u
you can do what mganovsky said which is what I would have said and you can also add a person to the loan and not title to give you more income. There are quite a few things that will give you more income. You can also make that a second home and use a lease that will give you enough 75% income to decrease the dti. you have to play with the numbers
Can't have rental income on a 2nd home, if so, it is an investment property, not a 2nd home, and then you're back to convincing the underwriter that the current residence will indeed be a rental and the new acquisition is not the rental. These scenarios are being countered to NOO all the time these days. Not that easy to document OO status, even when true. The many who abused the system have ruined it for others. I know a ReMax agent whose MB sister financed 2-5 properties for each of their investors in Palmdale, CA, all qualified as OO. Not a surprise the neighborhood has just about completely gone into foreclosure. |
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slants
3736 Posts |
Posted - 04/30/2008 : 2:05:38 PM
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quote:
Originally posted by no1doesbetter4u
you can do what mganovsky said which is what I would have said and you can also add a person to the loan and not title to give you more income. There are quite a few things that will give you more income. You can also make that a second home and use a lease that will give you enough 75% income to decrease the dti. you have to play with the numbers
Anyone on a Note will have to sign the security intrument (Deed of Trust) and must have ownership interest on title. |
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ordon46230
32 Posts |
Posted - 04/30/2008 : 2:08:24 PM
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Wow thanks a lot guys... ;) Yes he is upgrading into a much bigger and better zoned area. It will most likely be only minutes away from his current primary residence.
I appreciate all the feed back.
Thanks Guys!
Joe~
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slants
3736 Posts |
Posted - 04/30/2008 : 2:10:08 PM
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quote:
Originally posted by ordon46230
Wow thanks a lot guys... ;) Yes he is upgrading into a much bigger and better zoned area. It will most likely be only minutes away from his current primary. I appreciate all the feed back.
Thanks Guys!
Joe~
Well then, he may not have to list it. Just get a lease agreement and a copy of deposit check for the lease and you should be okay. |
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mantixmortgage
2505 Posts |
Posted - 04/30/2008 : 2:12:09 PM
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| lease that badboy out |
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slants
3736 Posts |
Posted - 04/30/2008 : 2:29:41 PM
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| Make sure rental income is at realistic market value and adjust to 75% of gross rent. Hopefully there is not too much negative cash flow and his DTI can handle it. |
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rtrefflich
2352 Posts |
Posted - 04/30/2008 : 3:43:24 PM
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Also, make sure to get a copy of the deposit check as well as the first month rent check. Get a RE professional to help you with the lease as well.
quote:
Originally posted by slants
Make sure rental income is at realistic market value and adjust to 75% of gross rent. Hopefully there is not too much negative cash flow and his DTI can handle it.
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