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Posted by Jeff Strickland on November 8, 2005, 8:34 pm
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It sounds to me like you are not understanding something, the liability of
the existing 1st isn't an issue in and of itself. The trouble is that while
YOU think you can make two payments for a while, your income and reserves
apparently do not support this view.
Your crecdit is apparently very good, and the loan officer is saying if you
go No Doc, then you say you are a brain surgeon, and you make $20,000 a
month, and everybody looks at this and says, it's possible, and they let the
loan go through. It would be difficult to say that you are a greeter at
WalMart making $20 k a month. On a No Doc, nobody looks at your assets and
reserves, and if your income is in line with yoru profession, then you're in
good shape.
Your problem isn't the other mortgages you have, the problem is the monthy
out-flow of cash relative to your income.
I suggest you take the No Doc, and consider getting it as an Interest Only
for 5 years, or so. You get a fixed rate payment for 5 years, and this
should be ample breathing room for getting your stuff done and selling the
existing home. I also suggest you convert your existing home to rental
property.
> Hello group!
>
> Looking for some advise or maybe just an opinion from the pros in this
> group.
>
> Trying to buy (build, actually) a house in a development that's about 800
> feet from where I live now. One of my ideas is to settle on the new home
> BEFORE selling the one I live in now.
>
> With the house delivery date being kind of soft (30 days window being
> promised, but I guess, 60 days delays can also be expected) and with the
> new home being in such close proximity, I thought it would make it a
> little easier on my family if we live in the current home until everything
> is ready to go in the new one.
>
> Problem arose when trying to apply for a mortgage. The broker is pretty
> much saying that the sale of the current home is mandatory, and I have to
> settle on the old house before the new one. This is a deal breaker for me.
> I do not want to move to a temp place, and renting it back from the buyer
> will limit my chances of selling on this, already cooling off, market.
>
> The broker is saying that the problem is not paying two mortgages for few
> months (which is also tough to approve, although I can temporarily afford
> it) but the liability of the first mortgage. Unless I did not understand
> the explanation, it seems like having the additional liability of the
> first mortgage will not allow any lender to lend me money, no matter if I
> can pay monthly or not.
>
> Someone had mentioned no-doc mortgages to me. I don't know much about
> them, but it sounds like no-doc would mean that no other mortgage will be
> taken into consideration. Is this an option for me? Well, is no-doc my
> ONLY option? I understand that those are more expensive mortgages (how
> much more?), but I would be re-financing it right after the sale of the
> current home. Hopefully within 4-6 months. Is there something wrong with
> this plan?
>
>
> Cheers!
> D.
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>
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Posted by DA on November 8, 2005, 9:33 pm
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Jeff Strickland wrote:
> It sounds to me like you are not understanding something, the liability
> of
> the existing 1st isn't an issue in and of itself. The trouble is that
> while
> YOU think you can make two payments for a while, your income and
> reserves
> apparently do not support this view.
> Your crecdit is apparently very good, and the loan officer is saying if
> you
> go No Doc, then you say you are a brain surgeon, and you make $20,000 a
> month, and everybody looks at this and says, it's possible, and they
> let the
> loan go through.
Thank you for your suggestions, Jeff.
I have to admit, I do not understand something here. You’d think this is a
very common situation, and not only brain surgeons should be able to
accomplish that. Millions of people move every year in this country, and
many consider moving from the old house directly into the new one without
renting in between. How is it normally done? I would also have to admit
that I might be lazier than most, but I am ready to pay (if it does not
cost an arm and a leg, obviously) for the convenience of not having to
rent a temp place. The construction and its schedule introduces an
additional twist, but in the end it would be very similar to what anyone
moving from one house to another have to go through. Additionally, I don’t
want to keep the old place (no desire to become a landlord), so I would be
willing to get rid of the first mortgage as soon as I’m moved out and the
house sells, but how do you tell WHEN it sells if you’d want to add a
clause (sell within xx days) to a mortgage app (I don’t know if it’s even
possible to add such clause)
Although no-doc looks more and more like the only option, I’m still
looking for creative ways to accomplish the goal.
Cheers!
D.
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Posted by Jeff Strickland on November 9, 2005, 8:01 pm
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>
> Jeff Strickland wrote:
>
>> It sounds to me like you are not understanding something, the liability
>> of
>> the existing 1st isn't an issue in and of itself. The trouble is that
>> while
>> YOU think you can make two payments for a while, your income and
>> reserves
>> apparently do not support this view.
>
>> Your crecdit is apparently very good, and the loan officer is saying if
>> you
>> go No Doc, then you say you are a brain surgeon, and you make $20,000 a
>
>> month, and everybody looks at this and says, it's possible, and they
>> let the
>> loan go through.
>
> Thank you for your suggestions, Jeff.
>
> I have to admit, I do not understand something here. You'd think this is a
> very common situation, and not only brain surgeons should be able to
> accomplish that. Millions of people move every year in this country, and
> many consider moving from the old house directly into the new one without
> renting in between. How is it normally done? I would also have to admit
> that I might be lazier than most, but I am ready to pay (if it does not
> cost an arm and a leg, obviously) for the convenience of not having to
> rent a temp place. The construction and its schedule introduces an
> additional twist, but in the end it would be very similar to what anyone
> moving from one house to another have to go through. Additionally, I don't
> want to keep the old place (no desire to become a landlord), so I would be
> willing to get rid of the first mortgage as soon as I'm moved out and the
> house sells, but how do you tell WHEN it sells if you'd want to add a
> clause (sell within xx days) to a mortgage app (I don't know if it's even
> possible to add such clause)
>
> Although no-doc looks more and more like the only option, I'm still
> looking for creative ways to accomplish the goal.
>
You're right, millions of people move every year. But they sell one house
first. You are trying to keep one house and build a second one at the same
time. This exposes you to two mortgage payments for some unknown period of
time. Most people make a purchase with a contingency that the existing
residence be sold within some period of time. The vast majority of buyers
buy properties that are essentially ready to be moved into. When they buy
homes that are under construction, then they have some lag time to deal with
that can only be resolved by renting somewhere.
Put the existing house on the market, and if it sells and closes before the
new house is finished, then you have to be prepared to move into an
apartment for a couple of months, or rent the house back from the buyers if
they agree.
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Posted by Grover C. McCoury III on November 9, 2005, 8:19 pm
Please log in for more thread options With a true "no-doc" loan, the lender is qualifying you based upon your
credit report alone - you do not have to show an employer nor do you have to
show assets/income on the loan application. Therefore, all information on
your credit report, including any existing mortgages, will be considered
during the qualification process. "No-doc" loans are generally only
available to those with excellent credit scores/reports.
Your options are as follows:
1) Apply for the new home as an investment property - must qualify to carry
both mortgages
2) Apply for the new home as a primary residence and rent the one that you
currently own showing a lease/first rent payment as evidence - *some* of the
rental income will be used to offset your current mortgage payment
3) Apply for the new home as a primary residence and sell the one that you
currently own before closing on the new home
4) Apply for the new home as a primary residence, get a
construction/permanent loan and agree to sell your primary residence before
you take possession of the newly constructed home. You must deliver a
HUD1(settlement) statement before modification from a construction to
permanent mortgage (i.e., when house is completed).
> Hello group!
>
> Looking for some advise or maybe just an opinion from the pros in this
> group.
>
> Trying to buy (build, actually) a house in a development that's about 800
> feet from where I live now. One of my ideas is to settle on the new home
> BEFORE selling the one I live in now.
>
> With the house delivery date being kind of soft (30 days window being
> promised, but I guess, 60 days delays can also be expected) and with the
> new home being in such close proximity, I thought it would make it a
> little easier on my family if we live in the current home until everything
> is ready to go in the new one.
>
> Problem arose when trying to apply for a mortgage. The broker is pretty
> much saying that the sale of the current home is mandatory, and I have to
> settle on the old house before the new one. This is a deal breaker for me.
> I do not want to move to a temp place, and renting it back from the buyer
> will limit my chances of selling on this, already cooling off, market.
>
> The broker is saying that the problem is not paying two mortgages for few
> months (which is also tough to approve, although I can temporarily afford
> it) but the liability of the first mortgage. Unless I did not understand
> the explanation, it seems like having the additional liability of the
> first mortgage will not allow any lender to lend me money, no matter if I
> can pay monthly or not.
>
> Someone had mentioned no-doc mortgages to me. I don't know much about
> them, but it sounds like no-doc would mean that no other mortgage will be
> taken into consideration. Is this an option for me? Well, is no-doc my
> ONLY option? I understand that those are more expensive mortgages (how
> much more?), but I would be re-financing it right after the sale of the
> current home. Hopefully within 4-6 months. Is there something wrong with
> this plan?
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Posted by DA on November 10, 2005, 1:40 pm
Please log in for more thread options Grover C. McCoury III wrote:
> With a true "no-doc" loan, the lender is qualifying you based
> upon your
> credit report alone - you do not have to show an employer nor do you
> have to
> show assets/income on the loan application. Therefore, all information
> on
> your credit report, including any existing mortgages, will be
> considered
> during the qualification process. "No-doc" loans are
> generally only
> available to those with excellent credit scores/reports.
> Your options are as follows:
> 1) Apply for the new home as an investment property - must qualify to
> carry
> both mortgages
> 2) Apply for the new home as a primary residence and rent the one that
> you
> currently own showing a lease/first rent payment as evidence - *some*
> of the
> rental income will be used to offset your current mortgage payment
> 3) Apply for the new home as a primary residence and sell the one that
> you
> currently own before closing on the new home
> 4) Apply for the new home as a primary residence, get a
> construction/permanent loan and agree to sell your primary residence
> before
> you take possession of the newly constructed home. You must deliver a
> HUD1(settlement) statement before modification from a construction to
> permanent mortgage (i.e., when house is completed).
Thank you for suggestions, Grover.
Let me re-phrase that: you are saying that no-doc mortgage IS NOT an
option for me because the first mortgage will, obviously, show in my
credit report. Is that correct?
Also, this has been mentioned couple times here, but what is considered a
good credit score in relation to no-doc mortgage application? I mean, it
can go all the way up to mid 800s. Is 800+ what gets considered?
And, lastly, if no-doc is not the option, applying for the new one as an
investment property seems the way to go. Is the application process any
different? I guess, I would have to say that in WILL NOT become my primary
residence then. What would happen if I actually move in?
Thanks!
Cheers!
D.
-------------------------------------
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Delivered via http://www.equity-loan.info/
Your home, its financing and everything about it
Web and RSS access to your favorite newsgroup -
alt.org.natl-assn-mortgage-brokers - 368 messages and counting!
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