Posted: 7/28/2010 6:55:27 PM EDT
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Hopefully I can get a little advice from ARFCOM on my real estate problem/question. Here is the deal.
I recently moved out of a home that I have a 30 year fixed mortgage on. I have a renter in there and the home is still on the market. My wife and I had to move around 800 miles away for family/career reasons. Currently we are in a small rental house and we are not happy with it. We could be paying a good portion of a decent size mortgage with the rent we are paying on our rental, so we are considering buying another house. Our only problem is that it would help out a lot if we had more down payment money, which we would have plenty if our old house was sold. We penciled it out and we could afford both mortgages even if the renter decided to leave. The house we are selling is only 2 years old, so it is nice and will sell for a good price. We (she) is just having real issues with our crappy rental. Are there loans I could get without putting anything down and refinancing when our old house sells? Any other deals I could work out with a house we are wanting to buy? Any suggestions would be appreciated. Thanks Henry |
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Getting a mortgage isn't as easy as it use to be. First, I don't know anyone who is doing no money down mortgages today. Second, the income ratios are firm. Your current income will have to cover the ratios for the both your old mortgage payment and the proposed mortgage payment. The rent you receive will be heavily discounted so it will not offset dollar for dollar your old mortgage payment for the purpose of he income ratio, even if the rent payment covers dollar for dollar the old mortgage. How much of a discount I'm not sure these days but since you don't have long rental history my guess it will be deep.
Depending on what the local real estate market is like where you moved your best bet might be to work something out with a seller. Sellers are willing to deal. Maybe a lease option with part of your payment going towards equity or short term owner financing (...say 3-7 year loan with 30 year amortization with ultra competitive interest rates) some older sellers might even like the fact that they are earning interest on their money since bank deposits are paying next to nothing. Finally there is the possibility of private mortgages, but this is tougher today as well. Good luck. |
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Quoted:
Ok...another question. What does "tag" mean? I see it all the time and don't know what it means. Thanks again. Henry It's shorthand for "this thread is of interest to me, and I'll keep track of the information posted in it". For members who have set their preferences so that they are automatically subscribed to a thread when they post in it, responding with "tag" is easy. |
| Pretty sure that no money down is dead with the exception of VA mortgages. FHA only requires 3.5% down and may be an option. You will be required to pay montyly mortgage insurance for 5 years minimum though, even if your old home was to sell one week after you bought the new home and you paid the balance down to 50% loan to value. |
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Quoted: Hopefully I can get a little advice from ARFCOM on my real estate problem/question. Here is the deal. I recently moved out of a home that I have a 30 year fixed mortgage on. I have a renter in there and the home is still on the market. My wife and I had to move around 800 miles away for family/career reasons. Currently we are in a small rental house and we are not happy with it. We could be paying a good portion of a decent size mortgage with the rent we are paying on our rental, so we are considering buying another house. Our only problem is that it would help out a lot if we had more down payment money, which we would have plenty if our old house was sold. We penciled it out and we could afford both mortgages even if the renter decided to leave. The house we are selling is only 2 years old, so it is nice and will sell for a good price. We (she) is just having real issues with our crappy rental. Are there loans I could get without putting anything down and refinancing when our old house sells? Any other deals I could work out with a house we are wanting to buy? Any suggestions would be appreciated. Thanks Henry Probably something like what you need existed a few years ago during the credit boom. Unfortunately, easy money to anyone who could fog up a mirror is over. And just because you CAN afford to pay both mortgages if the renters left, doesn't mean you should. My advice: Sell the house with the renters in it. Get aggressive on pricing and dump it. Put an extra bounty on it with your realtor. Take the hit. Then qualify/buy a new home in your new area at historically low interest rates...you might even break even. |
Zero down payment is going to be tough, i think you picked the wrong time in the last 70 years. However, I'd highly advise looking into a foreclosed home, I closed on one the other day for about 1/7 of its 2005 price. However, many foreclosure auctions are cash only  Do your homework, tons of really beat up houses, but some jewels out there in the auctions.
I dont know if you have your heart set on one house, but find a few you like and lowball them. Chances are you'll get responses back, most people are tight on cash now days and will take offers that were an insult a few years ago. I'd also advise keeping your rental if possible, tens of thousands are getting the boot out of their homes and they've got to live somewhere... with shitty credit what are their options? - Rent. I'd also advise a 30 year mortgage where you can pay down the principle when desired. I'd never advise getting a fixed 30 year, but this way you can engineer your own mortgage, and if things get tough for whatever reason, you have the option to drop down to lower payments to free up some cash flow. When things are good pay as much as you can to shed years off, if things get bad, pay the minimum to maintain the 30 year plan. Just my .02 |
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Quoted:
Zero down payment is going to be tough, i think you picked the wrong time in the last 70 years. However, I'd highly advise looking into a foreclosed home, I closed on one the other day for about 1/7 of its 2005 price. However, many foreclosure auctions are cash only Do your homework, tons of really beat up houses, but some jewels out there in the auctions.
I dont know if you have your heart set on one house, but find a few you like and lowball them. Chances are you'll get responses back, most people are tight on cash now days and will take offers that were an insult a few years ago. I'd also advise keeping your rental if possible, tens of thousands are getting the boot out of their homes and they've got to live somewhere... with shitty credit what are their options? - Rent. I'd also advise a 30 year mortgage where you can pay down the principle when desired. I'd never advise getting a fixed 30 year, but this way you can engineer your own mortgage, and if things get tough for whatever reason, you have the option to drop down to lower payments to free up some cash flow. When things are good pay as much as you can to shed years off, if things get bad, pay the minimum to maintain the 30 year plan. Just my .02 Good advice. Buy a home that you could easily afford to pay off in 15 years, but borrow the money for 30 at historically low rates. Make a payment from the beginning that will pay off the 30 year mortgage in 15. As was suggested if times get tough you can drop back to the 30 year payment. Don't buy the MOST home you can afford, today it is lower anyway because of the ratios. Don't stretch your finances. If you are married don't count on both of your incomes even though lenders will. Only borrow what one of your incomes could cover, not both. Consider a home purchase a none investment. It is going to years for the housing market to recover from the housing bubble so don't expect great returns, after real estate stabilizes it will be great if home values increase enough to cover inflation which is what home values did in many areas for almost 15-20 years prior to the bubble. People didn't get GREAT returns on their homes. The time of fantasitc returns is over. There is a lot of talk about doing away with the 30 year mortgage and maybe dropping the maximum term to 20 or even 15 years. Think about what that will do to home values. The more expensive the home the fewer buyers you have, shorten the terms and the monthly payment goes up requiring more income to meet the ratios. I think the older generations of Americans were smart. They bought modest homes, paid them off quick. They knew what they should afford, not what someone said they could afford. |
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Depends on what you want... There are a lot of forclosures out there and you could qualify for a traditional 80/20 if the home is selling for what it will appraise for...with little to nothing down (because you would have 20% equity already). many lenders aren't playing that game anymore. Besides the appraisals are coming in much lower. There are now all kinds of regulations preventing lenders and appraisers from "discussing" anything. No more telling the appraiser what the home NEEDS to appraise at. Many lenders consider the best indication of value for loans purposes as the price at which the home sold. So I think it is going to be very hard to get built in make-believe equity like people were doing before the bubble went boom. The house is worth what it sold for. If it went to foreclosure and sold for much less then it cost years ago it is worth much less that what it cost years ago. My granddad said it best. You can say it is worth anything you want, but it is only worth what someone will pay you in cash money for it right now. |