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Old 07-27-2008, 11:12 PM
 
94 posts, read 289,746 times
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Is it possible to obtain a new mortgage while currently selling your house? We just had another contract fall thru on financing. But we put a contract on a nother home and have been apporved all based on the sale of this home.

But might they let us anyway if we can do the downpayment and closing costs anyway? Thanks
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Old 07-27-2008, 11:29 PM
 
Location: NC
1,264 posts, read 2,123,491 times
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It's not just closing costs and downpayment. It's also your Debt-to-income ratio and, for some lenders, the amount of assets you have for reserves. Can your income support both mortgages plus any other debt reporting on your credit report?
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Old 07-28-2008, 12:30 AM
 
Location: Cary, NC
1,036 posts, read 3,634,693 times
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I have had this happen before and it depends on your DTI as Chip said. In many cases you will need to sell the current home to pay off the loan OR to show a valid lease on it to show that it is rented to cover the payments. I had a client recently that decided to rent his home out when the sale fell through because he did not want to start the process over again.

You need to make sure if the financing you are getting will allow either renting or keeping the home when you buy a new one. The best advice is to call the person that approved you and DISCLOSE EVERYTHING. They are in the position with all the information needed to explain your options.
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Old 07-28-2008, 08:56 AM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,122,831 times
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It's not if you're able to buy the 2 homes....but are you willing to make 2 mortgage payments?

Nobody can tell you how many months you will be making 2 mortgage payments. You will waste of money like that...

It would be better to sell your home first, and go in a rental for a couple of months. That way you'll only have 1 housing payment instead of two.

People wonder how they ruined their credit and/or have a foreclosure!

Quote:
Originally Posted by DadofTwo View Post
Is it possible to obtain a new mortgage while currently selling your house? We just had another contract fall thru on financing. But we put a contract on a nother home and have been apporved all based on the sale of this home.

But might they let us anyway if we can do the downpayment and closing costs anyway? Thanks
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Old 07-28-2008, 03:05 PM
 
94 posts, read 289,746 times
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well sorry but what exactly is the difference between paying rent which is what we have doen for the past year which is higher than a mortgage payment?

We are at a point in which we are discussing this with our bank guy and it of course will come down to our income. So we will probably try to lease the house we put an offer on and have a contract on before the contract on house fell through.

We are not trying to foreclose. Thank you very much for your assumptions. We were not like other nimwits out there buying what they could not afford or not read loan papers. If we wanted to foreclose we certainly could have by now.
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Old 07-28-2008, 03:16 PM
 
Location: Charlotte, North Carolina
5,137 posts, read 15,122,831 times
Reputation: 1008
paying rent wouldn't be higher than paying 2 mortgage payments.
I only suggest renting until you find a new home after you sell your first one.

Nobody 'tries' to foreclose...things happen, and making 2 mortgage payments doesn't help. Believe me when I say that you're not the first person who said they wont foreclose or it's 'no big deal'.

At least with rent you can leave sooner than having to worry about selling the place that you're currently living at...

Your lender will decide if you can afford both. Nowadays the guidelines are tougher for owning more than 1 home.

Quote:
Originally Posted by DadofTwo View Post
well sorry but what exactly is the difference between paying rent which is what we have doen for the past year which is higher than a mortgage payment?

We are at a point in which we are discussing this with our bank guy and it of course will come down to our income. So we will probably try to lease the house we put an offer on and have a contract on before the contract on house fell through.

We are not trying to foreclose. Thank you very much for your assumptions. We were not like other nimwits out there buying what they could not afford or not read loan papers. If we wanted to foreclose we certainly could have by now.
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Old 07-28-2008, 10:00 PM
 
94 posts, read 289,746 times
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and where would you suppose i live in the other state where my job is? the way i see it we either rent which is more than a mortgage payment. we paid 840 a month on a tiny little studio w/ two kids and can pay 800 on a 1750 sq ft home. so which makes more snese?

and no many people don't attempt foreclose .... but I know first hand people in our wonderful sunny state that bought homes at inflated values given to them buy mortgage companies and now they lost value big time and are walking away ...... and then of course those funny little papers people must not have read regarding those arm loans ....and the it was like omg! my morgtgae payment just went up!
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Old 07-29-2008, 01:46 AM
 
Location: northern california
380 posts, read 2,120,048 times
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Quote:
Originally Posted by renriq02 View Post
At least with rent you can leave sooner than having to worry about selling the place that you're currently living at...

Your lender will decide if you can afford both. Nowadays the guidelines are tougher for owning more than 1 home.
I agree this is why you might want to rent until you can sell the first home. I don't think renriq02 is trying to lump you with all those folks who used funny loans then walk away, but cautioning about all the crazy circumstances that can affect any person esp in this market.

If I've read the mortgage experts' responses correctly, you'd likely pay a much higher rate for a second home, which could make it much more expensive than just renting for now.

And/or what would you do if you lost your job and had to move again? Or what if you hate your new job or new state and want to leave? Would it be easy to sell the second home? Would you want to go through that stress again? The luxury I have now as a renter buying a home without a place to sell first is just so striking compared to so many posts of frustrated sellers on the real estate forum (yours included).

If you want to move and can't sell the second home, would you be able or willing at that point to get a third mortgage? Although maybe at that point you'd actually be doing well as a landlord renting properties and this could be your new job. But if that's not a probability, it sounds like there's a lot of risk to buying a second home when the first is still out there. Anyway, I think everyone's just trying to make sure you're going in w/ your eyes wide open, not trying to be patronizing or judgmental. JMHO -- good luck w/ this and w/ selling the first house.
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Old 07-29-2008, 08:03 PM
 
Location: Southeast Georgia
65 posts, read 216,373 times
Reputation: 46
Can you afford to make two mortgage payments for a year or more or afford to take a big lose on the sell of your home? If yes, then by all means buy the second house. If no, then why take the chance on the assumption that it will sell in a month or two?
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Old 07-29-2008, 08:18 PM
 
Location: Charlotte, NC
2,193 posts, read 4,457,854 times
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I dont think the OP would be asking this question if he knew his finances would be able to take care of both mortgages and knew he had plenty of reserves in the bank.

If you have to ask the question on here, then you might need to think twice about it.

Even if the home in the new area u are moving to is cheaper, would if the roof starts leaking or the ac breaks down, can you afford such a huge expense? That's the risk you take in having two homes.

Even if you rent out your other home , are you prepared financially if you can't rent it for a certain period of time?
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