Renting My Primary House and Purchasing Another?
I live in Upstate New York and have my primary house plus 2 rentals. I have been trying to sell my primary house for the past year but have had no luck. It is on the water and there are a limited amount of people that look at these houses, the previous owners had it listed for 2+ years before selling. I just a a child and need more room ASAP. I have been debating renting this house out because of the amount of money I have put into it over the years. I purchased the house for $265K 10/07. I did 2 mortgages to get away from pmi because I had very little to put down at the time and this gave me a smaller payment. Of course 1st loan was $210K @ 6.8% and 2nd loan was $40K @ 7.8% so I am paying a boat load of interest. I went to refinance the 1st loan earlier in the year, it came back assessed @ $255K and I cannot remember exactly why I could not do it but it was either because of the 2nd loan being to high still (This loan was through a different bank as it was sold sometime back) or the ratio of the first loan to the assessed value. At the time of trying to refinance I owed $197K on 1st and $35K on 2nd. I also asked my loan officer questions on renting my primary after not being able to refinance. I wanted to rent my primary and move into a rental while we looked for another house. He said this would not work because after the economy crapped out to many people were purchasing cheaper housing and then defaulting on the more expansive property. I cannot remember everything he had told me but I think one of the requirements was having the rental income on my taxes. I am currently paying down the 2nd loan and hope to have it paid off first quarter of next year so I can finally refinancing the 1st. So my main question is lets say i rent my primary out in April/May of 2013 and then rent another place myself how long would I need to keep that rented before banks would let me purchase another house. I have excellent credit and make more than enough to qualify for another house? Any info will be greatly appreciated. by joshck_402_302 from Rochester, New York. Oct 3rd 2012
William J Acres (William_Acres)
#74 ranked lender in Arizona - 8,728 contributions
It sounds to me that you went to a bank rather than a mortgage broker.. First of all, you need to refinance your home now. If your current loan is owned by Freddie or Fannie, and was initiated prior to May 2009, then you can refinance the 1st at today's low interest rates. You cannot add the 2nd to the loan, so they would have to re subordinate, but there are many lenders out there doing these HARP 2.0 loans... 2nd, you can purchase another home if you wish... if you have 2 other rentals, you do have to show the income on your tax returns... if you have not, then you should include that income on your 2012 taxes, since HARP 2.0 loans and conventional loans in general only require 1 years taxes... anyway.. I can go on and on about your scenario, but as I stated earlier.. It sounds like you were talking to a bank teller rather than a mortgage broker.. The best advice I can give you is to contact a LOCAL mortgage broker and apply with them. Not the local "Big" bank, and certainly not one of those 50 states internet lenders...By applying with your LOCAL Broker, you have an advantage because he's familiar with local customs and works with numerous lenders, seeking out the best loan terms for your particular scenario. Because he has lower overhead, he can offer you lower rates and lower fees than most of the larger lenders, but the number one reason you should deal with a broker is his education.. he is trained in looking at your complete profile and determining the right loan for your exact circumstances... I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com
Thank you for the info!!!!! My 1st mortgage is currently w/ Bank of America (Originally Countrywide). I am not sure on the Fannie/Freddie where can I find this? I did get this info through a loan officer at my current bank that i tried to refinance at. I have had my 2 rentals for the past 6-7 years and have showed them on my taxes the entire time. So if I rent out my primary and move into a rental that is not mine for a short period4-6 months then I should be able to get a loan for another house if all my numbers are good? Would I need to have my primary on my taxes to be able to purchase another? I will definitely be looking for a local broker now. Thanks
So if I rented this place out in November/Decemeber and only had 1-2 months rent on my 2012 taxes will this be enough for the lenders when it comes time to purchase maybe mid 2013? House will be rented out from then on. I cannot refinance right at this moment as I have been pouring my money into the 2nd mortgage and need to build up funds for closing cost etc at this point. My 5 month old has already taken over most of my house and I may not survive another year if I do not get more space.
Michelle Curtis Loan Originator NMLS 401173 (MichelleCurtisLO)
#77 ranked lender in Florida - 2,245 contributions
I believe I can get you refinanced now. I would need to speak with you to get more info. You can start renting your primary in November and as long as you claim the rental income on your taxes and can prove a lease you can use the rental income. As long as your numbers look good you should be able to purchase at anytime after your taxes are filed. Feel free to reach out to me to discuss. 201-962-3555 Team@BestMortgageOption.com Michelle
Linda Wintersteen (Linda123)
#63 ranked lender in Arizona - 1,256 contributions
in order to count the new rental to offset your mortgage payment it does need to be on your tax returns for 1 to 2 yrs., and you can look to see if you are a fannie or freddie, proabably fannie due to it being a bank of am loan go to www.fanniemae.com put in your address name and the last 4 numbers of your social security number and for freddie it is www.freddiemac.com i can loan in your state my email is yourloanpartnerforlife@live.com and as long as you can qualify for the 3 rentals and a new primary, you can be okif you refi now, it would be better, cuz banks/lenders look at all of this , and to qualify for primary refi, you need to be owner occupied, and since you have value on your first mortgage, and we can subordinate the second, that should work for you, and banks/ lenders do at times come back and check out homes to see if is a primary or a rental, and the rules on your deed of trust, is you have to be primary / owner occupied for a mimium of 60 days, up to 90 days..
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