Wonkothesane wrote: I'm assuming (hoping) the 20% down thing doesn't apply?
I wouldn't move if you don't 20% down.
You should move when you have some equity. In Illinois you pay mortgage insurance if you don't put 20% down. That could be another $100-$150 a month.
You can get FHA loans with the usual terms (3.5% down etc). Our local CU also offers loans cheaper than the FHA loan with 5+% down, but my impression is that the availability of these loans depends very much on where you are.
In the old days a lot of people bought the second one, carried a bridge loan, then sold the first one.
I strongly recommend against that. Sell the one you've got first, then find a new one. Don't commit to carrying 2 loans.
Wonkothesane wrote: \ My main questions are: What kind of loans are available? What kind of money down is expected? Are there any other tricks I need to know about? Thanks!
Loans are avaliable depending on credit and income. DTI has dropped to ~35% on average. Thats full ratio not a back end ratio. Compared to 45% front end three/four years ago.
Sub jumbo loan is 10x easier then jumbo. Which is sounds like you are doing.
20% is now expected, 10% loans are around but harder to get. There are no more 10/80 loans that you can sneak in on. 5% if you have special loan products are out there.
As a example, I have a 8% front end ratio on my current house, minimal credit score (not enough history) 10 years of mortgage payments in raw savings and 20% in equity and I had a hard time refinancing my house 6 months ago with a minimal doc loan.
Wonkothesane wrote:BoxheadTim wrote: You can get FHA loans with the usual terms (3.5% down etc). Our local CU also offers loans cheaper than the FHA loan with 5+% down, but my impression is that the availability of these loans depends very much on where you are.I thought FHA loans were only for the first timers?
Not AFAIK and the FHA website doesn't make an obvious mention of it either.
SVreX wrote: In the old days a lot of people bought the second one, carried a bridge loan, then sold the first one. I strongly recommend against that. Sell the one you've got first, then find a new one. Don't commit to carrying 2 loans.
I moved 11 years ago and everyone told me to carry 2 loans until my first house was sold. Bridge loans.
Then my loan guy states I don't make enough money for a bridge loan. So I quickly get busy selling my first house.
Sell house #1 and pile up the cash. Good luck.
And you guys did so well on the last mortgage question....
OP - get thee to thy local credit union or community bank. They will look at your situation and advise you of options, which will be determined by your capacity and credit. Most likely you will have to sell the existing home in order to qualify for the new one. If you are lucky, you may be able to time this so that it happens more or less at the same time, perhaps even the same day.
Carrying both homes, even for a short time, would require significant capacity (income) and reserves, not to mention impeccable credit. Even then, it is not for the faint of heart.
20% down is ideal if you have it but there are options for lower down payment and they aren't necessarily awful. FHA loans are not restricted to one use, but except in rare circumstances you can't have two at the same time. Conventional loans with mortgage insurance are available with 5% down (sometimes 3%). Have the mortgage geek at the CU crunch the numbers and show you a comparison of both options - I suspect they will be close.
Not sure why we're even talking about Jumbos with $15k in resources. Back ratio and full ratio are the same thing. Credit scores are the key to the puzzle as wearymicrobe discovered. You can be made of solid gold but without a decent score you're going to struggle. Decent is 680 or above. Below 620 is death. You need to be well into the 700s before anyone is going to be impressed with your credit.
In a perfect world, you find a new home and sign a contract contingent on the sale of your existing property. Then you get a quick buyer and you schedule both closings on the same day. You use the proceeds of the sale as the down payment on the new home.
In an imperfect world, the safe bet is to sell first and live in temporary housing until you can close on the new purchase. Anything less will cause you sleepless nights.
Good luck!
Burn house to the ground. Collect insurance, go buy house and new stuff.
Moving sucks.
Or do what I did. Assuming you have equity in your current house. Rent the first house. Refinance it with cash out. Use the cash to make the down payment on 2nd house. Net $400 a month off the first and use it to pay down faster mortgage faster. I would also bank at least 6 months payment on the rental house just in case it stands empty for month or two.
Toyman01 wrote: Or do what I did. Assuming you have equity in your current house. Rent the first house. Refinance it with cash out. Use the cash to make the down payment on 2nd house. Net $400 a month off the first and use it to pay down faster mortgage faster. I would also bank at least 6 months payment on the rental house just in case it stands empty for month or two.
This will be difficult - these days my employer is requiring 6 months cash reserves to do a strategy like this - a coworker of mine is running into a similar issue, but he makes enough to carry both mortgages. With the cash reserve requirement, IMO you'd be better served just throwing that money at a down payment.
The least painful method is going to be to get the existing house sold first, then close on new house. If you sign a contract before the sale on the existing house closes, make the offer contingent on sale of existing house.
Also, just as a note - FHA defines "first time home buyer" as someone who hasn't bought a house in 5 years. So if you've met that requirement, FHA is available to you as an option. It doesn't get you out of mortgage insurance though, so keep that in mind when budgeting.
And with your 6.5 hour commute comment - you may be better served renting for a while as you settle into the new area, not just in terms of timing but also to get a feel for the market in that area. It's always worth it to not have to make decisions under pressure...
Contact a reliable realator. They can answer all of your questions and even be helpful in the process.
Jumbo loan = a loan that is too big for Fannie/Freddie to touch. In most areas this is a loan amount of $417,000, higher in some places depending on a cost of living calculation. With the numbers you're referencing, don't even worry about it.
Our realtor was amazing - made the process so much easier. If you are moving for work - any chance the hiring company can provide some assistance (in terms of advice, although with money would be even better)?
szeis4cookie wrote: And with your 6.5 hour commute comment - you may be better served renting for a while as you settle into the new area, not just in terms of timing but also to get a feel for the market in that area. It's always worth it to not have to make decisions under pressure...
This. I'm glad we're renting out here at the moment as that gave us time to get a feel for the area before we start searching for a house to purchase in earnest.
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