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Old 12-23-2013, 11:30 PM
 
1 posts, read 3,913 times
Reputation: 11

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I live in MA currently and am looking to buy a house in TN
I have several questions I hope can be answered.
I've been looking at houses $70,000 and below and have found many that I'm interested in.
But since it is out of state, I'm wondering what the requirements for getting a mortgage would be. Here in ma I was pre approved for a 3.5% interest rate. My credit is close to perfect and I am a first time buyer. I work in ma and have not been able to transfer to TN but I plan on working down there, just at a different company.
How will this complicate my home buying?
Will my interest rate or amount of down payment be higher if I buy the house as an investment property or second home/ vacation home?

If I end up transferring to TN but staying with the same company I work for currently, what will the lenders need in order for me to qualify for a mortgage? Will they need pay stubs as proof? Transfer paperwork etc? I'm just so confused lately, please let me know if you've been in a similar situation and have some tips. Thanks! Kim
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Old 12-29-2013, 02:54 AM
 
Location: Utah County
10 posts, read 23,635 times
Reputation: 20
For a second home, you will need at least a 10% downpayment, For an investment property, you need 20-25% down. The interest rate might be slightly higher than a primary residence.

Applying for a home loan after a job change is tricky - lenders want to see stability.
If you can do a transfer within the same company, you should be able to just buy the new home as a primary residence - 5% down, better loan terms.
If you change companies but stay within the same line or work and your paychecks actually show the same income or an actual increase.. you can apply for a primary residence loan within a few months (6 would be good).

Primary residence always gets better loan pricing because the risk is smaller to the lender. If you're ever in a rough spot, you are more likely to default on a second home/investment than on the roof on top of your head.
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Old 12-31-2013, 07:28 AM
 
Location: Southern California
4,453 posts, read 5,772,864 times
Reputation: 2220
Quote:
Originally Posted by Dana Anghel View Post
Primary residence always gets better loan pricing because the risk is smaller to the lender. If you're ever in a rough spot, you are more likely to default on a second home/investment than on the roof on top of your head.
If I run into a rough spot I'd keep my income producing investment property, unless the investment property is what is creating the rough spot.
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Old 01-12-2014, 04:05 PM
 
Location: Utah County
10 posts, read 23,635 times
Reputation: 20
Consider the following hypothetical situation: you end up with renters that will not only become unable to make the monthly payment, but they don't even maintain your property, causing a lot of damage (think water damage for example). The state laws make it very difficult and lengthy to evict them, so the process drags on for a few months. Economic factors make the rent prices drop below your monthly mortgage payment, and on top of it all, you lose your job or perhaps are unable to work for a period of time due to some health problem.
You only have enough funds to make one mortgage payment: will you chose to keep the roof over your family's head, or save the investment property that currently drains the life out of you?
Lenders will always consider the worst situation possible when extending credit, they will not consider common sense.
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Old 01-13-2014, 01:20 AM
 
3,806 posts, read 8,288,334 times
Reputation: 4948
You were never pre-approved for a 3.5% interest rate.

Ever.
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