Rules for Buying a Primary Residence Without Selling Current Home!

By
Mortgage and Lending with AmeriFirst Financial, Inc. NMLS#222444

 

Rules for Buying a Primary Residence

Without Selling Current Home! 

 

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”

§         2 yr history of managing investment property

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.

However, for your clients that do qualify – this may be the perfect time to discuss this option.

 

What does it all mean to you? Working together, closing more business than ever!

 

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"The information provided has been based on rules and regulations issued by Federal Agencies and interpreted for you by MortgageCurrentcy.com.  Interpretations are not guaranteed but we attempt to make them both easy to understand and help you sell more real estate.  Check with your local and state authorities to ensure that you meet all requirements and disclosures."

 

Copyright © 2010   Reprinted with permission   MortgageCurrentcy.com

 

Posted by

Amerifirst Financial

Please join my Tips and Advice Page for Realtor's on Facebook by clicking here.

 

JAYNE COMBS
Sr. Mortgage Loan Officer
NMLS# 222444

jcombs@amerifirst.us

www.jcombs.amerifirst.us


(661) 965-0088 Cell
jcombs@firstcal.net

 

Impossible is just a reason for someone not to try.......

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Tags:
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buying a second home
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Rainer
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Coach KC™ The Prosperitor™
Prosperitor LLC dba Secured Futures - Phoenix, AZ
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Great post Jayne, very useful information. Thank you very much, greatly appreciate it. --Coach

Oct 01, 2013 11:05 AM #1
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Jayne Combs NMLS#222444

Loan Officer & Cert. Divorce Lending Professional
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