Second Home Purchase (1st is VA)

[tsu1112]

Hello All,

I am looking for some advice on my situation.

My wife and I purchased a home in the Dallas-Ft Worth area in 2004, 146K, with a VA loan. Payments are made to Citi Bank and we currently owe 127K and it was appraised this past year at 150K  My wife was layed off from her job in late 2005 and she found a great new job in Houston so we moved there in early 2006. I just tranferred with the company I work for and we are both still with those companies. We began to rent our home out as soon as we moved to Houston (240 miles away) and it is still rented out to this day. We have always claimed the rental income on our taxes and use a property manager there to collect the rent and communicate with the tennant.

My wife and I have been renting a home in Houston since that time and love the area where we live. We want to buy a home here in late 2012. I don't think credit scores will be an issue, we are both at 680 - 710 range and should be higher by the time we are ready to buy. My question is about obtaining another VA or FHA loan while still keeping the other home.

In addition, I keep receiving calls and junk mail to refinance my current VA loan. In 2004 we received a great rate at the time of 5.23%. Can we refinance that home without curretnly living there?

Any help would be appreciated.

[tsu1112]

additional info -

Combined income 104K + rental income 1200 per month

Current mortgage payment 1300 month including tax and insurance

Car payment 325 month

100 credit card debt on 1000 limit with Discover

30 balance on Amex

144 monthy student loan account

0 negatives in 4 years

Looking to purchase 210K - 240K with 10K down 

[DallasLoanGuy]

VA allows you to streamline refinance the rental.... It should be a non-qualifying loan given the time(and assumed equity) you have been in the loan.

I doubt that you could get anothe VA loan.... Your eligibility beneits are tied up in loan #1. But it is worth a look.
An FHA loan is definatly doable given the circumstances.

Apply with confidence. Nothing I have seen here makes me think you will have any trouble.

[tsu1112]

Thank you for the information DallasLoanGuy.

Do you recommend any particlar place to go to for the VA streamline refinance?

[DallasLoanGuy]

any mortgage loan officer can do both the refi and the purchase......

well, as long as the loan officer is approved to do va/fha. some are not.

i dont think myfico lets the pros here 'recommend' places.Their rules are pretty strict, but there to protect you consumers from trolls.

[tsu1112]

makes sense, thanks!

[webhopper]

Hi! I am in the same boat. I bought a duplex with an FHA loan in 2008. I always claimed the income from renting out the side that I didn't live in. In may 2011 I rented out the other side of the duplex and moved into a house that I paid rent on. Some of the things required to qulaify for both homes are:

1. 6 months reserves of piti for both houses. They are using my Roth Ira and 401k vested funds to meet this reserve requirement.
2. Dwelling insurance on duplex which covers loss of rent in the event of a disaster
3. Enough income to make both payments and still have a dti of less than 38%

I make 5600 per month net income with 2025 per month in rental income.

Here are my bills:
Auto loan: 234 per monto
Auto loan: 480 per month
Student loan: 180 per month
Mortgage for duplex: 1566 per month
Discover card: 600 balance on a 3500 limit card


The mortgage underwriting was rough. They may ask for ytd profit/loss on your rental property. If you've claimed a net loss on your rental property, they will add the net loss in as a monthly debt. I was prequalified for a house up to 232k, however I chose to offer on a 166k house. Supposed to close in January. As long as you have your documentation on the rent house you should be fine. Underwriting may take longer, so be prepared for that

[webhopper]

Oh and the second house I'm buying is with 5% down payment. Conventional mortgage.

[tsu1112]

Thanks Webhopper for the insight.

I just received my GFE on Friday for the rental property IRRRL. 4.0 % interest, 0 points, and no appraisal. The entire cost was $2200.00. I went with the current mortgage company for the property.  I am pretty excited and I will actually be making money on the rental after it goes into effect.

I do not plan to purchase my primary residence home until the end of 2012 and want to use FHA so hopefully will not have all of the same requirements as your conventional.

[webhopper]

Ya, not too many people have the scenario with buying a principle residence while owning investment property. I think a lot depends on what the underwriting rules are when you actually apply for the new house. You may want to consider a conventional vs an FHA. Your scores are hood enough to qualify, and the loan itself will be cheaper in the long run. I plan on refinancing the duplex into a 75% ltv 15 yr fixed rate conventional within the next couple of years. With FHA you have to pay the pmi out for the full 30 yrs, however with a conventional you get to cancel the mortgage insurance as soon as the ltv equals 80%. From your data, you'd probably qualify for either FHA or conventional. FHA is usually for people with low credit scores and a smallish down payment.