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Regular Contributor
Ron6262
Posts: 137
Registered: ‎07-14-2012

Here we go again......

   After much credit repair and the healing touch of time I was able to purchase a home last summer on an FHA loan.   Well since the purchase life has taken a different turn and I ended up with full custody of my three kids and my girlfriend moved in with me.  This has left us without enough room in the current home.  We want to purchase a bigger house.

 

    Problem is this:   We want to keep the current home and rent it out.  Ideally we would like her to be able to purchase the new house, but she is self employed and her claimed income is likely to cause a problem.  On the good side she has perfect credit 750 plus and is debt free.  Does anyone have any ideas?

 

    I am mid 640's, could I be on the another loan just for my income to be used?  I have plenty of income to support both homes.  We are going to make some calls tomorrow, but wanted a little background before we do.

 

    Thanks

Valued Contributor
MovingForward_2012
Posts: 3,406
Registered: ‎12-19-2012

Re: Here we go again......

I think we need to know what the purchase price of the current home was or your current mortgage payment and how much house you are looking to buy plus your income.

If there is anyway you could find a renter now and have them sign a lease agreement starting from a point that you estimate closing will be and receive a deposit for the property, you might be able to provide that lease agreement to the Broker, which will show that you will be renting out your current house for $$$$ and then they may be able to exclude your current mortgage as debt. Just start by putting an ad in the paper or some other outlet saying available this summer! Come by and see the property today and a signed lease agreement plus deposit will hold the property.

No guarantees on this of course as in some twisted way someone can use this loophole for mortgage fraud which ruins it for everyone else. So, you might have to have the renter in the home for a determinate amount of time and prove you have been receiving rent for that time for the mortgage debt not to count against your income. But I would definitely talk to a broker and tell them you plan on renting your current house and what info would they need for the mortgage payment to not be factored in your DTI.
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Regular Contributor
Ron6262
Posts: 137
Registered: ‎07-14-2012

Re: Here we go again......

   Yeah, my DTI with current home is only 11%   With new home included it would still be under 20% or so.  Her claimed income alone cannot support the new home which has a purchase price of $240,000.   The other factor is we are currently unmarried, we are debating if we should get married before trying this or not?  We planned on marrying later this summer anyways, so the timing doesnt really matter.

 

    She doesnt have a DP, I will have to give her that, which isnt a problem.  Its kind of complicated, would not have been a problem before 2008, but now everything is an issue.

Valued Contributor
JM-AM
Posts: 3,303
Registered: ‎06-09-2010

Re: Here we go again......


Ron6262 wrote:

   Yeah, my DTI with current home is only 11%   With new home included it would still be under 20% or so.  Her claimed income alone cannot support the new home which has a purchase price of $240,000.   The other factor is we are currently unmarried, we are debating if we should get married before trying this or not?  We planned on marrying later this summer anyways, so the timing doesnt really matter.

 

    She doesnt have a DP, I will have to give her that, which isnt a problem.  Its kind of complicated, would not have been a problem before 2008, but now everything is an issue.


Take the time and go speak with a LO or Broker. Let them give you your options and explain the differences, and the chances of approval depending on which option you choose. Some LO's and Brokers will just give you their opinion on what they feel will work best in your situation for approval according to their Lender requirements.

 

Just make the time to speak to them and I am sure you will get all the information you need to get started on your new home purchase.

Good Luck
May all your dreams and wishes become a reality!
Regular Contributor
violetsmom
Posts: 146
Registered: ‎12-04-2012

Re: Here we go again......

We are doing exactly what you are trying to do. You cannot claim rental income uses you have at least 2 years history being a landlord. If not you have to qualify for the new mortgage with the existing loan payment included in your dti.

And as far as I know anyone applying for
Mortgage had to qualify with credit scores

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