If you are looking to purchase a new home, before the sale of your current home, it’s important to know how lenders will look at your situation for qualification.
For many homeowners who are looking to purchase a new home, the idea of selling their current home first or trying to align the sale of their current home and purchase of their new home simultaneously, is an idea that is less than appealing.
Other homeowners may want to keep their current home as an investment property altogether and purchase a new home to live in.
In the articles that follows, we address both of the above scenarios and what that means for qualifying for a new home loan.
New Home Purchase – Before The Sale Of Your Current Home
If you are planning on purchasing a new home and then selling your current home after moving into the new home, then you will have to have the income to qualify with both mortgage payments as monthly debts.
The only exception to this, is that if your current home is under contract and you could provide proof that all contingencies have been met on the financing for the buyer of your home, then you could exclude your current mortgage payment for qualification.
However, with Fannie Mae recently increasing debt to income ratios to 50%, you should always look into the ability to qualify outright with both payments, if you are selling, but not closing before your new home purchase.
Purchasing A New Home – And Keeping Your Current Home As An Investment Home
If you are planning on purchasing a new home and keeping your current home as an investment property, then you can include the potential rental income to offset your existing mortgage payment debt.
You will need to document an executed lease and a security deposit for the lease. In addition, lenders will only count 75% of the rental income for qualifying purposes, due to maintenance expenses in keeping an investment home.
Therefore, there are options to purchase a new home before the sale of your current home. Everyone’s situation is unique however and as always, it makes sense to speak to a licensed lender, such as Strategic Mortgage to fully qualify and see what home loan options are available to meet your specific situation.
For more information on home purchase loan or refinance programs for existing and potential home owners, please contact Bill Kamboukos of Strategic Mortgage at (480) 219-3682 or by emailing: firstname.lastname@example.org or online at www.strategicmtgaz.com
Strategic Mortgage, LLC – AZ BK#0909514 – NMLS#158804 – Equal Housing Lender – Vasilios Bill Kamboukos Jr – NMLS#160440