Great questions and thank you for supplying so much detailed information: The biggest question is are you going to occupy this new home as your primary residence? If you are then you can put as little as 3.5 to 5% down. If it is going to be a true second home then you would need to put down 20% minimum. If either one of you are veterans you would be able to take advatage of 100% financing on a VA loan. the best thing to do is have a full application ran by a local loan officer that you trust.Jun 21st 2011
When you a purchasing a home that you will not be occupying or as a second home, you would need to put 20-30% down. If you are upgrading or downsizing because kids are gone, then a lender will allow you for owner occupied financing. The problem is your current home. If you purchase another home and plan to live in it, then you would have to cover both mortgage payments. Since you dont have 30% equity in your current home, a lender will not accept rent payments to offset your DTI. So if you can qualify on both payments, go for it. If it would be to tight then look into selling your current home. Most lenders will approve your loan, then wait until your current home sells before they fund the new loan.Jun 21st 2011
The question is where is the 2nd home in relation to your current home. In this mortgage environment, Lenders usually are requiring the 2nd home be more in a resort community to essentially count it as a 2nd home. You could finance the new property as a principal residence. If you can make the downpayment without selling your current home. What they would require is a copy of the MLS listing on your preoprty you're selling & qualify you with paying both mortgage payments into your DTI. If you qualify then I see no issue.If your current home is not an FHA loan then you could qualify for that if all of the above falls into place. Let me know if I can help!Nancy J RelefordHome Equity Mortgage, LLC615-867-3060Jun 21st 2011
I would look at doing an FHA loan for the new home as a primary residence, and put your current residence on the market. Our FHA program allows for expanded debt to income ratios with compensating factors such as credit scores, assets, job history etc. Our fha 30 year fixed is at 4.25% currently.Jun 22nd 2011
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