Questions about purchasing 2nd home before selling the first
Hi, I have some questions I hope people here can help me out with.I currently own a home that is about 70 miles from my employer. I bought it because it was close to my old job, but I switched jobs about a year ago to where I am now, and gas and driving time are killing me.The home I currently own has a payoff of around $69k. I paid $72k for it 4 years ago.Due to the housing market conditions in the city, there are tons of cheap houses for sale. I am considering buying one for around 25k. Just looking on realtor.com, there are over 100 listings in the area I am looking at. Looking through them, there are tons of nice little homes that just need some TLC for that price. My only requirements are 3+ bedrooms and 2 bathrooms.I took out an FHA loan for my current home. It is my understanding that I can not qualify for an FHA loan again.If I purchase another house, are there still other loans I can get that are standard 30 year fixed rates? Or are these exclusively for FHA type loans?My plan is, buy a cheap but livable fixer-upper, move, put old house on the market, and after the old house sells start fixing up the new place.Taking a close look at my finances, it seems like I can alocate about $400 a month extra right now if I factor in what I'd save in gas as well. I'll take a loan from my 401k to cover a 20% downpayment so I don't have to pay PMI. A mortgage calculator online says a $25k house would have about a $150 payment, leaving me with $250 for taxes and insurance. Is this a reasonable assumption?I really want to move and quit commuting for over an hour each way to work, but I want to make sure I'm not getting myself in over my head. Any advice from anyone else that has gone through a similar scenario? by camija_937_797 from Bonifay, Florida. May 9th 2012
Janet Chavez (janet@commercialct.com)
#13 ranked lender in Connecticut - 6 contributions
You can get a conventional home loan. As long as your debt to income ratios are within fannie guidelines, it should not be a problem for your to obtain financing. You just have to find a loan officer that works for a mortgage company. This way he or she will be able to shop around your loan with many lenders. Since your loan amount for your second home is very small, the loan officer needs to find a lender who does not have a minimum loan amount. Some lenders have a minimum loan amount of $50,000. Also, your loan officer may be able to get an exception to the FHA loan guideline. When there is a hardship such as yours like commuting for an hour, you may still be able to get an FHA loan.
Mark Collins (ahfund)
#129 ranked lender in Florida - 13 contributions
You are correct - You probably can't get another FHA loan without first selling the property you have the loan on now. I was able to get an emergency doctor a second FHA loan because he was transferred to another hospital and a requirement was that he lived within 15 minutes of the hospital. But it was really tough to do it! I also agree with Janet that because your loan size is so small you might have problems finding someone to work on your behalf. I suggest you try visiting www.homepath.com and seeing what FNMA foreclosures are available. I checked Bonifray and only got one and that home was under contract. The MLS should show the amount for taxes BUT please make sure that any exemptions will follow you the first year you live in the home. I would hate to see you buy a home thinking the taxes were one thing and then turned out to be something more.I recommend you call your insurance agent to get a range on insurance quotes. You also need to verify whether flood insurance will be required. Best of luck - Mark
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