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Old 03-02-2014, 09:28 AM
 
9 posts, read 21,317 times
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What is the qualification as the second home in mortgage application?

I am buying a new built house close to downtown Houston, where is about 28 miles away from my current house. Our current daily commuting time is about 2.5 hrs to workplace. (rush hour traffic in Houston is a huge challenge). The commuting time from the new house will be about 40min every day. Cutting commuting time significantly is our main motivation. Our current house is about 1000 sqft bigger than the new one.

I am supposed to close the new house this coming week. At the last moment (last Friday), my current mortgage company ( AmeriSave) told me that they can not give me the rate I locked and signed about 25 days back. Instead, the company says now they only offer me the rate as an investment , not second home or primary home ( we are planning to rent or sell our current home after a transitional period). since the investment rate is much higher, I would have to pay about $200 interest every month.

I am very frustrated with the mortgage company - did not tell me that until last moment. AmeriSave asks why you downsize from 4400sqft to 3400sqft. Though I tried pretty hard to explain the situation, it insists now investment rate only.

So do you know what the qualifications are for a second home in mortgage application? Do you know any mortgage company will give me rate as second home orrimary home?

Thanks a lot.
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Old 03-02-2014, 10:09 AM
 
5,048 posts, read 6,108,114 times
Reputation: 4113
My first thought was a non-starter. I know someone trying to buy a home actually about 2 hours from where he works and lenders won't believe it will be his primary residence. Silly because even if he stays with a friend the occasional night, it's still his only home and he'll have family in it so it won't be vacant.

I think there's a big change up still getting settled. It used to be second homes were less lived in. Of course, with long work hours during the week, it may be Friday afternoon to Monday morning a person spends more time in his second home.

At any rate, I wonder why not the second home. I would say your mortgage company is not hands on if they let this happen at the last minute so, yes, you should get another one. Unfortunately, I don't know of one in your area. Have you asked at your bank or your boss or co-workers?

Is it that they feel you qualify on paper for one home and an investment home that bears the expectation that it will bring rent? But that you don't qualify for covering payments on two homes at once?

Without even looking them up, I gather they are a national company, maybe online, that has no idea of your area or commute times, etc. and only looking at figures on paper...and that only at the last minute when it has gone to an underwriter rather than the guy who fills out the blanks on an application.
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Old 03-02-2014, 10:41 AM
 
Location: Southern New Hampshire
6,520 posts, read 11,299,297 times
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When I bought my current house, I kept my old house and rented it out (so the OLD one became an investment property). Sounds like that is what you want to do -- BUT I had to have a signed lease in place AND proof of payment of the security deposit, otherwise my lender would not have approved the loan on my current house.

Can you get a renter set up NOW with a signed lease & paid security deposit? Or are you just wanting to do all that after you move? I can understand the lender being skeptical, they don't want you to be stuck with 2 mortgages.
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Old 03-02-2014, 10:54 AM
 
9 posts, read 21,317 times
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Quote:
Originally Posted by karen_in_nh_2012 View Post
When I bought my current house, I kept my old house and rented it out (so the OLD one became an investment property). Sounds like that is what you want to do -- BUT I had to have a signed lease in place AND proof of payment of the security deposit, otherwise my lender would not have approved the loan on my current house.

Can you get a renter set up NOW with a signed lease & paid security deposit? Or are you just wanting to do all that after you move? I can understand the lender being skeptical, they don't want you to be stuck with 2 mortgages.

Good thought here, it is a two mortgage issue? I may pay off the first one now if that is the case.
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Old 03-02-2014, 11:26 AM
 
Location: Southern New Hampshire
6,520 posts, read 11,299,297 times
Reputation: 18427
Quote:
Originally Posted by ButtonHouse View Post
Good thought here, it is a two mortgage issue? I may pay off the first one now if that is the case.
That's what it SOUNDED like to me, but of course I could be wrong. I wish I'd had the cash to pay off the first house (but then again, my tenants are paying the mortgage so I can't complain TOO much!!).
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Old 03-02-2014, 11:41 AM
 
Location: Long Island
8,950 posts, read 17,961,423 times
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Quote:
Originally Posted by ButtonHouse View Post
Good thought here, it is a two mortgage issue? I may pay off the first one now if that is the case.

Sent you a DM
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Old 03-02-2014, 12:08 PM
 
9 posts, read 21,317 times
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Quote:
Originally Posted by Elke Mariotti View Post
Sent you a DM
Thanks. I got it. I will try to contact her tomorrow .
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Old 03-02-2014, 12:13 PM
 
Location: Southern California
4,329 posts, read 4,739,510 times
Reputation: 2097
They told you what you wanted to hear to get you started an committed to them. It is not a two mortgage thing.

Karen actually rented her house out, are you planning on keeping both homes for yourself and not renting it either out?
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