Are You a Buyer? NEW Lending Challenges You Could Face

If you are a homeowner and you want to sell your home and buy a new one, there are 3 basic senarios that will play out - sell it, keep it, or rent it.

Mortgage guidelines are dramatically tighter for people "carrying two mortgages".

Among the changes this spring's buyers face are:

Are you selling your primary residence?
If you plan to close on your new home before you close on your existing home -- even if it's only by a day -- both payments must be listed as monthly debts on your mortgage application. This will disqualify the majority of homebuyers because of the debt you carry.

Are you going to convert your residence to a second home?
If your current home has less than 30% of equity, your mortgage application for your new home will not be approved unless you can show at least 6 months worth of mortgage payments plus the taxes on the current home in reserve for the current home and new home combined. This is what we are all facing now that the real estate enviornment and landscape changed.

Are you going to convert your residence to an investment property?
If your current home has less than 30 percent equity in it, any rental income derived from a tenant is disallowed on your mortgage application for the new home. You must still count the mortgage payment and the taxes with the insurance as debt.

Becoming a move-up buyer isn't as simple as it used to be before this mess begun. Now, new lending rules make buying a new home an exercise in timing and financial planning. And the rules are expected to get tougher than they are now.

The game plan--- PLAN Ahead!!

Call me for a FREE no-obligation consutation and I will help make sure you are on the right track before you begin your home search.