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Old 06-14-2010, 03:55 PM
 
8 posts, read 23,128 times
Reputation: 13

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My husband's company keeps moving us around the country due to economy issues and job assignments. They first moved us to out of state from California, where we tried to sell our house but couldn't as it lost 150,000 in value. We were able to buy a house in the new state as we tried to rent out our CA house but eventually couldn't continue to afford it and was approved by the bank to sell in a shortsale transaction. His company has since moved us to the East coast and we are renting a home in our newest state and renting out our house - as it has also lost some value and can't be sold at this time. Fortunately the rent covers most of the mortgage payment so we are okay in holding it as a rental for as long as we have to. I am not looking for sympathy related to losing money and our good credit due to housing market, what I am looking for is information on whether some day in the future we can purchase another home again, and what we have to accomplish to do that.

Right now here are the issues -
1.short sale completed in summer of 2009
2.rental home that has less then 20% equity - we had put 10% down, but my guess is it's a little underwater or right at what's owed. The mortgage payment in 2100 and we receive about 1575 in rental income - which is also documented in our taxes
3. minimal down payment of 10% (for a 300K house)
4. I don't think we could qualify for the rental property mortgage and a mortgage on the east coast without the rental income - the debt to income ratio would be too high:


We are fine with renting, but would like to purchase again and would like to know what we would need to qualify, or perhaps it's a lost cause??? My guess is that we won't be able to sell our rental home for years as it's generally a slow market there plus the neigborhood is still being built, so the rental property will probably have to be part of the equation.

Thanks
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Old 06-15-2010, 01:57 PM
 
Location: Albuquerque
1 posts, read 1,206 times
Reputation: 10
It doesn't hurt to just make an application for preapproval and see what they say. You said you are fine with renting, so if you don't get it, keep working on that down payment. 20% would be better.
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Old 06-16-2010, 01:56 PM
 
Location: Laguna Niguel, CA
768 posts, read 4,120,919 times
Reputation: 456
Were you late at all on anything when you did the short sale last summer?

How long have you been renting the rental home out and reporting the income on your taxes?

What is your income and your other payments on your debt?
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Old 06-17-2010, 02:47 PM
 
11,642 posts, read 21,439,147 times
Reputation: 12198
If you are likely to keep moving frequently why not just keep renting until markets are more stable?
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Old 06-21-2010, 06:41 AM
 
8 posts, read 23,128 times
Reputation: 13
Thanks for the info...we do plan on renting for awhile - both because we have to and because we are still concerned about the housing market, needing to move more frequently, and not wanting to ever get over our head with mortgage debt. But, someday - maybe 3-5 years from now if things seem more secure and we've saved up a good downpayment - we would like to have a more permament residence.

Someone asked our income/debts:
Income $135,000 per year
debt: $550 car loan, $2150 mortgage per month on rental (loan 218,000)
we receive $1500 in rental income, but due to equity can't include it.

No other debts or income. We did have lates on our mortgage during the shortsale - 120 days late, it was completed in July of 2009.
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Old 06-21-2010, 11:16 AM
 
Location: Laguna Niguel, CA
768 posts, read 4,120,919 times
Reputation: 456
Even though it wasn't a foreclosure, being 120 days late on a mortgage is the equivalent of a foreclosure in the eyes of a new mortgage lender. You'd be required to wait 3 years from the sale in July of 2009 (for FHA), 4 years for conventional (with 20% down) and 4-7 years for conventional (with 10% down, due to the requirement for PMI and PMI companies additional restrictions).

In 3 years, as long as you claim the rental income on your taxes, you should be able to use the rental income (less expenses & it's current PITI payment) to qualify. Even without the rental income though, as long as the property taxes/insurance costs aren't up the wazoo on the new home you'd be buying, a $300k sales price with 10% down using an FHA mortgage would put your housing ratio at about 20% and the total debt ratio at 44% (assuming a 6% interest rate, who knows where things will be in 3 years), and that should qualify just fine.
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Old 06-21-2010, 11:52 AM
 
8 posts, read 23,128 times
Reputation: 13
Thanks Shane for that info - that's exactly what I was looking for.
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