Posted on: 27th Jul, 2007 09:40 am
What is the best way to go about buying a second house? I am looking to upgrade to a better house but I still have my first house. I want to use the money from my first house to put down on the second but I want to buy the second house first.
Is it possible to get a 80/20 loan on the second house and once my first house sells, take that money to pay off the 20 loan?
Is it easy to qualify for a loan on the new house if I still own my first house? There will be a point where I would be paying mortgage on both houses until my first house sells.
I don't want to have to sell my first house and move into temporary housing until I close on a second house.
Is it possible to get a 80/20 loan on the second house and once my first house sells, take that money to pay off the 20 loan?
Is it easy to qualify for a loan on the new house if I still own my first house? There will be a point where I would be paying mortgage on both houses until my first house sells.
I don't want to have to sell my first house and move into temporary housing until I close on a second house.
Getting mortgage for the second house is quite possible. But you are saying:
"'There will be a point where I would be paying mortgage on both houses until my first house sells. "
In this context you will have to take proper decision. You need to judge how the market is like and whether the houses are getting sold in your region.
If the market is down then you will have problems in selling the house and will be stuck with payments on both houses for a longer time period.
You should have enough financial resources to continue the payments in the long run if it happens that finding a buyer for the first house is becoming difficult.
Miller
"'There will be a point where I would be paying mortgage on both houses until my first house sells. "
In this context you will have to take proper decision. You need to judge how the market is like and whether the houses are getting sold in your region.
If the market is down then you will have problems in selling the house and will be stuck with payments on both houses for a longer time period.
You should have enough financial resources to continue the payments in the long run if it happens that finding a buyer for the first house is becoming difficult.
Miller
Hi Stoven,
Welcome to Mortgagefit discussion board.
"Is it possible to get a 80/20 loan on the second house and once my first house sells, take that money to pay off the 20 loan?
"
Why are you looking for 80-20 mortgage? Have you tried 100% financing if making a down payment is difficult right now. And some other loans are also available with low down payment requirement.
Your intention is to pay off the second mortgage (20 part) after the first house gets sold. What if the real market slumps and you are not able to sell the house?
"Is it easy to qualify for a loan on the new house if I still own my first house?"
The usual approval checks will be made to ascertain if lending to you would be appropriate or not and whether it would be risky for the lender to provide you the loan. Your income should be sufficient to meet payments on both house and dti should be well within the set limits.
You are leaving too many things on the expectation that the first house will be sold quite easily. Another thing I'd like to know, how much is the balance on the mortgage for the first house? Will there be enough gains after the mortgage is paid off?
Thanks
Blue
Welcome to Mortgagefit discussion board.
"Is it possible to get a 80/20 loan on the second house and once my first house sells, take that money to pay off the 20 loan?
"
Why are you looking for 80-20 mortgage? Have you tried 100% financing if making a down payment is difficult right now. And some other loans are also available with low down payment requirement.
Your intention is to pay off the second mortgage (20 part) after the first house gets sold. What if the real market slumps and you are not able to sell the house?
"Is it easy to qualify for a loan on the new house if I still own my first house?"
The usual approval checks will be made to ascertain if lending to you would be appropriate or not and whether it would be risky for the lender to provide you the loan. Your income should be sufficient to meet payments on both house and dti should be well within the set limits.
You are leaving too many things on the expectation that the first house will be sold quite easily. Another thing I'd like to know, how much is the balance on the mortgage for the first house? Will there be enough gains after the mortgage is paid off?
Thanks
Blue
"What is the best way to go about buying a second house? I am looking to upgrade to a better house but I still have my first house. I want to use the money from my first house to put down on the second but I want to buy the second house first. "
If I were in your situation then I would prefer to go for the second home purchase after I had a buyer for my first home ready to purchase the house.
If I were in your situation then I would prefer to go for the second home purchase after I had a buyer for my first home ready to purchase the house.
Why not just get a bridge loan on your current home? Only one house payment (new home) for a period of time -- usually 6 months -- and then IO on the bridge.
Payment on bridge is not counted in your debt ratio for qualifying on new home mortgage.
Risk is whether your current home will sell within a year or so
Payment on bridge is not counted in your debt ratio for qualifying on new home mortgage.
Risk is whether your current home will sell within a year or so
Right now the real estate market isn't doing too good. It is a buyer's market right now, so I thought it would be a good time to upgrade to a bigger house. The issue is with selling my old house which could take awhile.
My current mortgage is around $160k with a house value around $240k. I am looking to get a house in the $300k+ range. Since buying my house, my income has more than doubled now that my wife is working so I would be able to pay both mortgages for awhile. I just don't like the idea of owning property that is sitting empty and costing me money.
A bridge loan sounds okay but they have high interest rates which worries me if my house is on the market for over a year. I thought that with an 80/20 loan, the 20% mortgage would at least have a lower interest rate than a bridge loan.
I haven't thought too much into this since my current house requires a lot cleaning and yard work before putting it on the market. My wife suggests we sell our house and move into my parent's until we close on a new house which I really don't want to do.
My current mortgage is around $160k with a house value around $240k. I am looking to get a house in the $300k+ range. Since buying my house, my income has more than doubled now that my wife is working so I would be able to pay both mortgages for awhile. I just don't like the idea of owning property that is sitting empty and costing me money.
A bridge loan sounds okay but they have high interest rates which worries me if my house is on the market for over a year. I thought that with an 80/20 loan, the 20% mortgage would at least have a lower interest rate than a bridge loan.
I haven't thought too much into this since my current house requires a lot cleaning and yard work before putting it on the market. My wife suggests we sell our house and move into my parent's until we close on a new house which I really don't want to do.
Hi Stoven,
Welcome back.
I think your wife's suggestion is something that can be considered. First of all sell your house and then stay in a property until and unless you close on the loan. This will be good as far as getting a loan against a second home is considered. This is because not many lenders are willing to offer loans on a property to someone when he already has a mortgage on another property.
However, the market isn't doing good as you say. So, it may take for you to find out a potential buyer.
Thanks
Welcome back.
I think your wife's suggestion is something that can be considered. First of all sell your house and then stay in a property until and unless you close on the loan. This will be good as far as getting a loan against a second home is considered. This is because not many lenders are willing to offer loans on a property to someone when he already has a mortgage on another property.
However, the market isn't doing good as you say. So, it may take for you to find out a potential buyer.
Thanks
Listed my house in the fall and could not sell it. Love the house I am considering. I'm downsizing. It is worth approximately $70,000 less than my current house. I'm afraid I'll lose it. I need money from the current house to purchase the new house. What do I do?
Hi Pat Winslow,
You can contact the lender and check if he will do a short sale. In the short sale, you will have to give away the property to the lender and he will try to sell it in the market. While selling, if there is a deficient amount, resulting from the sale, you will have to pay it to the lender. However, you should note that a short sale will affect your credit and lower it by 75-100 points. And if the house is sold at a higher amount, the lender will give back the extra amount to you. In that case, you can use that profit to buy the new house.
Thanks.
You can contact the lender and check if he will do a short sale. In the short sale, you will have to give away the property to the lender and he will try to sell it in the market. While selling, if there is a deficient amount, resulting from the sale, you will have to pay it to the lender. However, you should note that a short sale will affect your credit and lower it by 75-100 points. And if the house is sold at a higher amount, the lender will give back the extra amount to you. In that case, you can use that profit to buy the new house.
Thanks.