cancel
Showing results for 
Search instead for 
Did you mean: 

Buying a second home?

tag
amclaughlin42
Regular Contributor

Buying a second home?

we bought a house in 2021 and were just not happy where were at. We lived here about 18 months, weve hit financial hardship as well due the pandemic affecting my job and medical issues with my children. Were getting back in a better place financially. I can get my debt paid down and get my mortgage score usable again. 

But how do I go about getting a new mortgage when I already have one. I want to sell my first home and move into a new one. But what steps do I take first? I am not clear on this process. Doing research now so I know what steps I need to take. Will the housing market crash in the next year and negatively impact me selling my home?


Cards: CreditOne AMEX - $600, Cap1 QS - $500, Avant-$300, Cap1 WM Store - $300
GOAL - Chase FU - Goal Score 725
07/2021 - Experian 675 Equifax 673 Transunion 688
07/2019 - Experian 623 - Equifax 628 - Transunion 622
04/2019 - Experian 597 - Equifax 610 - Transunion 619
01/2017 - Experian 479 - Equifax 457 - Transunion 461
04/2017 - Experian 502 - Equifax 473 - Transunion 476
Message 1 of 3
2 REPLIES 2
203bravo
Established Contributor

Re: Buying a second home?

You can make an offer on another home that is contingent on both you selling your current residence and being able to obtain financing for the new mortgage.

 

This way you will be protected and able to re-coup your earnest money in the event that you are unable to close if your home does not sell or you are unable to get a new mortgage that covers the offer on the new home.

Best of luck.

 

Message 2 of 3
ShanetheMortgageMan
Super Contributor

Re: Buying a second home?

You'll first want to talk with a loan officer to see what you can get pre-approved for. 

 

If you have enough income to qualify for your current mortgage payment + the new mortgage payment, and you have the funds to purchase the new home without selling your home, then that gives you the most flexibility since you can make an offer to buy a home without it being contingent upon the sale of your home.


A lot of people don't fit that situation though, they either don't have enough income to qualify for both mortgages or are short on funds to buy the new home.  In that case, like 203bravo mentioned, you'd have to make an offer on a new home contingent upon your current home selling*.


Up until recently, getting an offer accepted with a contingency of selling your home has been a challenge since the number of buyers heavily outweighed the amount of homes for sale.  That has started to level out in a lot of markets, the market you are considering buying in might be one of them.  As this balance changes in favor of more homes on the market vs. amount of buyers, sellers usually become more likely to accept offers contingent upon selling your home.  The market in your area might be turning to favor buyers as well, so you may want to consider selling, that would be a good conversation to have with your real estate agent.

 

After you know how much you can qualify for, if you'll need to sell before you can buy a new home, and what you could possibly sell your home for you should have enough info to determine what route to take.

 

* Fannie Mae has an exception which allows you to exclude your current housing payment from your debt-to-income ratio without selling it, if the below requirements have been met:

  1. You are under contract to sell your home
  2. Can provide confirmation any financing contingencies your buyer has have been cleared
Free Mortgage Advice & Pre-Approvals (FHA, VA, USDA, Fannie, Freddie, Non-Prime, Construction, Renovation/Rehab, Commercial) since 2002
Located in Southern California and lending in all 50 states
Message 3 of 3
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.