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New Visitor
happymom80
Posts: 1
Registered: ‎01-29-2013
0

Looking to Rent current home and purchase new home - Please help!

My husband and I are interested in renting our current home and purchasing a larger home for our growing family size (three children). Current home is FHA ARM with decent rate. Our ficos are in the 660-670 range due to a fraudulent collection found on my husbands credit (still working on getting this removed). We would have to go conventional on the new home but only wanted to put 5% down, which puts us at a major disadvantage because of our ficos. We would have to qualify for both payments which we could based off our income. Also was looking at the homepath program but I'm not sure if it'll be a good fit because of the fraudulent collection still showing on his credit.

 

My question is whether or not we should first refi the current home into a conventional so that it would open our options on the new purchase? Or would that only hurt our credit further and delay us being able to move forward with buying a new home?

 

Also we do not have the option of selling our current home as it is currently underwater due to the housing market.

 

We have elderly parents we are also planning on taking in with the new home and don't really want to wait too long but still want to make the right choice for the future.

 

Any suggestions or comments would be appreciated.

Regular Contributor
violetsmom
Posts: 146
Registered: ‎12-04-2012
0

Re: Looking to Rent current home and purchase new home - Please help!

We are in the same position. We are planning on renting our current house (we are about $15k under water after closing costs and fees) and building new. However our existing mortgage is fixed at 3.875. I can't imagine renting out and not having the peace of mind that my payment will not change.

Not sure about refi-ing existing into conventional, we were told a 680 mid score is the requirement for conventional...

Also we are using. Program through our realtor and property manager called guaranteed lease, basically builder pays them a commission and in return they take over property management of our rental free of charge to us for 2 years. If for any reason the house is not rented we are guaranteed, at the minimum, a check to make the mortgage payment. We figure after 2 years we will either no longer be under water, or we can keep renting this house and keep as investment.
Regular Contributor
violetsmom
Posts: 146
Registered: ‎12-04-2012
0

Re: Looking to Rent current home and purchase new home - Please help!

Sorry hit post too soon :smileyhappy:

May e look into guarantees lease options in your area? Pretty sure it only works with new construction, and don't know how popular it is but when we were given this info we jumped on it. Houses here are going like hot cakes!

Not sure if refinancing before purchase is okay. I imagine they want to see no new loans for a period of time. Good luck!!
New Visitor
ttnorman
Posts: 1
Registered: ‎02-04-2013
0

Re: Looking to Rent current home and purchase new home - Please help!

My husband and I are in the same situation. We can not sell and want to buy. We are looking at the home path . com to see if that is an otp. I will pay close attention to your outcome. We were told we could not have two FHA loans so we must go conv. loan. Refi is out because we are 20k underwater. What a stressful time. No sure where to start!

Thanks

Valued Contributor
JM-AM
Posts: 3,303
Registered: ‎06-09-2010
0

Re: Looking to Rent current home and purchase new home - Please help!

Thats correct if the home is under water it depends how much is owed and what it will appraise for.

Good Luck
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