Rules for Buying a Primary Residence Without Selling Current Home!
What if you can’t sell your home, but would still like to buy? Here’s everything you need to know.
Rule: Home on the market and purchasing new primary residence Q: What if the current home is NOT sold before purchasing primary residence?
~Must qualify with both monthly payments ~6 months worth of monthly payments for BOTH homes as a “cushion” ~Can be reduced 2 months worth of monthly payments if current home is 70% LTV or below
Q: What if current home is sold-but NOT closed before purchasing primary residence? ~Must present non-contingent sales contract for sold home ~Must present a lender’s valid loan approval for the new buyer ~Does not have to qualify for both payments ~6 months worth of monthly payments for BOTH homes as a “cushion” ~Can be reduced 2 months worth of monthly payments if current home is 70% LTV or below ~If sold to relocation company, copy of executed buyout agreement, client does not need mortgage payment cushion or count current payment in qualifying ratios
Rule: Converting Primary Home into Second Home and purchasing new primary residence Q: What if client wants to convert their current home into a second home and purchase another primary residence? ~6 months worth of monthly payments for BOTH homes as a “cushion” ~Can be reduced 2 months worth of monthly payments if current home is 70% LTV or below ~Qualify for both monthly payments
Rule: Converting Primary Home into an Investment Property Q: Can you qualify using rental payments? ~70% LTV or less on home being converted to rental home ~Fully executed lease agreement and Proof of receipt and deposit (into bank) of security deposit ~2 months worth of payments for BOTH homes as a “cushion”
Q: What if the LTV is more than 70%? ~Must qualify with both monthly payments ~6 months worth of monthly payments for BOTH homes as a “cushion”
Q: How is the LTV determined? ~Exterior-only appraisal dated no more than 60 days from the date of closing.
Only certain borrowers will qualify. But this may be a great time to discuss your options and see if you do.
Travis Newton, Mortgage Broker
Information compliments of Travis Newton WJ Bradley Mortgage Branch Manager/Sr. Loan Officer 503.931.4490 travis.newton@wjbradley.com
Published on: Jun 26, 2011