topic Re: Want to move but not sell my current home in Mortgage Loans

Want to move but not sell my current home

terlsa — Tue, 12 Sep 2023 23:56:09 GMT

So, our plan is to rent out our current home and buy another house. We would like to do that ASAP. However, the home we are living in closed last year in November. Are there lenders who will finance a primary home even when it's been less than a year since the last mortgage closed?

If not, when would be the soonest I could expect to get a pre-approval to put an offer on a new loan?

Thanks!

Re: Want to move but not sell my current home

ShanetheMortgageMan — Wed, 13 Sep 2023 00:11:05 GMT

When you purchased your home as your primary residence you most likely signed something at closing confirming you'd move in within 60 days and occupy the property for the first 12 months of the mortgage. After that then you are free to move out without violating that agreement. But that is your agreement with the current lender, not the new lender you'd be getting your mortgage to purchase a home from.

You said you closed in 11/2022, so in about 60 days you'll be at the 12-month mark. It usually takes around 30 days to close on a new home from the time your offer is accepted, so there'd be that amount of time + you could choose not to move in right away to make sure you'll meet the 12 month requirement your current mortgage has, as you'll just need to occupy your new home within 60 days of closing. You could even offer a seller rent back on your purchase so they could pay you a per diem to remain in the home for a short time after closing, giving the seller greater flexibility and potentially making your offer more attractive.

However, even though you signed the agreement that you'd occupy your current home for the first 12 months of the mortgage, exceptions can be made in extraordinary circumstances so you might want to talk with your current lender if you think there is a good chance you would be moving out before the 12 month mark.

Your new lender should be aware of the common 12 month occupancy requirement as well, as it's pretty standard, but if it'll be around 12 months between when you purchased your current home vs. when you are closing on the new home then usually you won't get much of a hassle on the new mortgage you're applying for.

Re: Want to move but not sell my current home

terlsa — Wed, 13 Sep 2023 00:25:11 GMT

Thank you Shane, I knew I could count on a well put together response on this from you.

So I guess i will try calling my lender and asking them if I would have their blessing. It closed November 4th, so worse case I will probably just wait until next month to look for approvals.

Re: Want to move but not sell my current home

ShanetheMortgageMan — Wed, 13 Sep 2023 00:37:30 GMT

You're welcome. The process to get an exception for the 12 month requirement usually need to be approved by management, so waiting a couple weeks to hear back isn't out of the question. I'd recommend you get pre-approved first, see what the market is like (unless there is a lack of buyers or homes are sitting on the market you might get outbid on your first choice), then decide if you'd actually be moving out before the 12 month mark.

Also, I found the verbaige that is most likely contained within your "Mortgage" document you signed at closing, which is:

Borrower must occupy, establish, and use the Property as Borrower’s principal residence within 60 days after the execution of this Security Instrument and must continue to occupy the Property as Borrower’s principal residence for at least one year after the date of occupancy, unless Lender otherwise agrees in writing, which consent will not be unreasonably withheld, or unless extenuating circumstances exist that are beyond Borrower’s control.

So I want to point out that the standard amount of time is 12 months after the date of occupancy (not the first 12 months of the mortgage), so if you bought the home on November 4th but for example didn't move in until the 10th then from my understanding the 12 months begins from the 10th.

Re: Want to move but not sell my current home

VAMortgageGuy — Wed, 13 Sep 2023 17:03:42 GMT

@terlsa wrote:
So, our plan is to rent out our current home and buy another house. We would like to do that ASAP. However, the home we are living in closed last year in November. Are there lenders who will finance a primary home even when it's been less than a year since the last mortgage closed?

If not, when would be the soonest I could expect to get a pre-approval to put an offer on a new loan?

Thanks!

It really depends on the reason. If you have a really good LOE, it's possible to get approved before the 12 months are up.

For example: The new home is bigger and in a better school district for your kids.

Re: Want to move but not sell my current home

terlsa — Wed, 13 Sep 2023 17:43:39 GMT

Just out of curiosity, how do you document when you occupied the home? We didn't have a home at the time the house closed, so it was basically occupied immediately.

Re: Want to move but not sell my current home

ShanetheMortgageMan — Wed, 13 Sep 2023 18:22:37 GMT

@terlsa wrote:
Just out of curiosity, how do you document when you occupied the home? We didn't have a home at the time the house closed, so it was basically occupied immediately.

There is no standard documentation, but for example if someone asked me to prove when I moved into my current place I'd provide them a receipt for the movers I hired which listed the date of my move. Or another way could be to provide a copy of a utility bill showing when service started.

Re: Want to move but not sell my current home

terlsa — Wed, 13 Sep 2023 19:34:56 GMT

Well I did end up talking to a lender, they basically said as long as it closes after 11/4/2023, I should be good. So I am planning on getting preapproved next month and start looking then! Thanks again for your help.

Re: Want to move but not sell my current home

ShanetheMortgageMan — Wed, 13 Sep 2023 21:06:00 GMT

Anytime!

Re: Want to move but not sell my current home

terlsa — Tue, 26 Sep 2023 18:12:02 GMT

Just an update for someone in a similar situation. I spoke to a few lenders, most said I would need to wait till October as the loan would need to close after November 4th (the date our current hosue closed last year). Then I spoke to this scrappy loan officer who said we could do it! Basically, as long as I wait to occupy the home, we can close in October (they give you 60 days). We ended up putting an offer on a home that was accepted, we close October 15th.