I want everyone to be aware of a new Fannie Mae/Freddie Mac guideline concerning disposition of your current property before purchasing a new property.
"If current principle residence is pending sale, but the transaction will not be closed (with Title transfer to a new owner) prior to the new transaction":
Than...
"Both the existing and new mortgage payments must be used when qualifying for new mortgage"
That means we can no longer use rental projections to offset the current mortgage payment. The seller would have to take the current property off the market and declare it an investment property. The seller would have to obtain an actual lease and show 1st and last months rental payment deposited. And you can only do that if the loan to value is below 70% on the current property. This is a huge issue. This guideline went into effect July 15, 2008.
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