I've spoken to a various LOs and received different information. Hoping anyone with recent similar xp or knowledge might share their thoughts.
I will be moving to Charlotte this June and would like to purchase a home by October. My current primary residence is a condo that I own. However, I cannot sell at this time, so I will be renting it out when I move. (Due to ongoing HOA/developer litigation and some existing short sales and foreclosures in the buliding...) I'm aware of the FHA and conventional guidelines regarding when/how rental income can be figured into D/I ratio when qualifying -- which means I'm aware that I can't use it because I'll have neither the required equity nor the rental history.
My questions are:
1. How many months reserve do I need to cover PITI on both properties? Will 401/IRA assets qualify towards that?
2. Assuming conventional loans, do lenders vary wildly in what D/I ratio they use for approval? I've been told so many different numbers, I don't know what to believe. And does having an existing mortgage (as in my situation) affect what ratio they use or is all debt considered the same?
3. I will be living in a short-term rental while I house hunt, which is considerably more expensive than my current place - but by all means still affordable. Will lenders scrutinize that sudden higher cost of living at all when reviewing bank statements?
4. Is it reasonable to consider a lower interest ARM in order to reduce new home PITI and subsequent D/I ratio for approval? I'm 99% sure I won't be living there for more than 5 years, so 5/1 or 7/1 are acceptable to me.
5. I anticipate 5-10% down on 250-300k home. Are these reasonable numbers or do I have my head in the clouds thinking I'll be approved? FHA 3.5% may not be possible as I am considering some non-FHA approved townhomes.
-FICO: 802
-Current PITI + HOA: $1140 (LTV is ~82%, 154k outstanding)
-Student Loan: $157 (fixed monthly, 22k outstanding)
-Gross monthly income: $7250 (average of past 2 years is $7500 when including bonus)
-5 years steady salaried employment w/ same employer
-401/IRA: 50k
-Cash: 35k
Thanks for any input!!