Getting a mortgage-impossible?

[StitchesGr8Fan]

Let me give you some background. I have a townhouse that I rent out because the area tanked with the economy. I live elsewhere and don't pay rent so I'm saving tons of money. I'm not going to be able to sell the townhouse for a few years because the market is saturated with foreclosures and short sales.

DBF and I are thinking about looking at houses. I'm concerned that there is no way anyone would let me buy another house even though we will have a good down payment, my salary is double what it was when I bought my townhouse so I have enough income to pay both mortgages, and savings to cover any gaps in renters. I'm thinking DBF would have to be on the mortgage alone, which would drastically reduce what he would get approved for. I have no debt other than my mortgage and a car payment. Am I doomed if we try to get a mortgage together? I understand banks are being super cautious, but we could take one of those houses of their hands if they would let us.

 

[kimkoz]

Sorry I'm really not sure.

Banks only offered us half of what we really wanted and could pay. We ended up going with a friend who's a morgage consultant. He was able to price around and gave us what we wanted. He was willing to listen more. Maybe talking to someone like that, and who can do the shopping around for you. Ask your friends and family - They may know someone.

 

[LuvMickey36]

I used a mortgage broker and was happy. Some loans stipulate that you cannot own any other property. Good Luck! There are so many out there these days that you should be good to go!

 

[ccgirl]

Let me give you some background. I have a townhouse that I rent out because the area tanked with the economy. I live elsewhere and don't pay rent so I'm saving tons of money. I'm not going to be able to sell the townhouse for a few years because the market is saturated with foreclosures and short sales.

DBF and I are thinking about looking at houses. I'm concerned that there is no way anyone would let me buy another house even though we will have a good down payment, my salary is double what it was when I bought my townhouse so I have enough income to pay both mortgages, and savings to cover any gaps in renters. I'm thinking DBF would have to be on the mortgage alone, which would drastically reduce what he would get approved for. I have no debt other than my mortgage and a car payment. Am I doomed if we try to get a mortgage together? I understand banks are being super cautious, but we could take one of those houses of their hands if they would let us.

Realtor here. I don't even show clients a property until they are pre-approved for a mortgage. Banks are a lot stricter than they used to be. I also find that once clients are pre-approved it really is a reality check. For example, I had clients that wanted to look at 400K houses but they were only pre-approved for 250K. My best advice is to get pre-approved so you know you can get a mortgage, and know what home price you are looking at before you even start. Good luck.

 

[Belle0101]

FWIW - if I were a loan officer I would loan you money before I would my neighbor's daughter. She works part-time, very part-time, and her boyfriend does not work at all. He's still in college. They are home shopping and very dissapointed that they can't get a loan especially because she, the daughter, has "very good credit."

You could always go to a few banks or credit unions, talk to a loan officer and see what they say. That or a realtor. Ours was knowledgable and what he wasn't sure of he had a network of friends to call on for an answer. Very helpful.

Good luck to you!

 

[lost*in*cyberspace]

See a mortgage broker, although with one mortgage already, it's highly unlikely that you will qualify for another. If you do get approved to buy with your DBF (boy friend?), you also need to consult a good attorney about the wisdom of signing on a mortgage with a legal stranger. Not a good idea.

 

[elgerber]

Let me give you some background. I have a townhouse that I rent out because the area tanked with the economy. I live elsewhere and don't pay rent so I'm saving tons of money. I'm not going to be able to sell the townhouse for a few years because the market is saturated with foreclosures and short sales.

DBF and I are thinking about looking at houses. I'm concerned that there is no way anyone would let me buy another house even though we will have a good down payment, my salary is double what it was when I bought my townhouse so I have enough income to pay both mortgages, and savings to cover any gaps in renters. I'm thinking DBF would have to be on the mortgage alone, which would drastically reduce what he would get approved for. I have no debt other than my mortgage and a car payment. Am I doomed if we try to get a mortgage together? I understand banks are being super cautious, but we could take one of those houses of their hands if they would let us.

If you have no late payments on that townhouse, good credit, and your situation is as good as you say, there is no reason you wouldn't be able to buy a house. I am a loan processor, and we have many customers who own other houses that they just can't sell right now. The only glitch would be if you have an FHA loan on the townhouse and want an FHA loan on the new house. You can only have 1 FHA loan.
Other than that, I see nothing that would prevent you from getting a mortgage.

 

[WDWisTheBest]

Let me give you some background. I have a townhouse that I rent out because the area tanked with the economy. I live elsewhere and don't pay rent so I'm saving tons of money. I'm not going to be able to sell the townhouse for a few years because the market is saturated with foreclosures and short sales.

DBF and I are thinking about looking at houses. I'm concerned that there is no way anyone would let me buy another house even though we will have a good down payment, my salary is double what it was when I bought my townhouse so I have enough income to pay both mortgages, and savings to cover any gaps in renters. I'm thinking DBF would have to be on the mortgage alone, which would drastically reduce what he would get approved for. I have no debt other than my mortgage and a car payment. Am I doomed if we try to get a mortgage together? I understand banks are being super cautious, but we could take one of those houses of their hands if they would let us.

Realtor here. I don't even show clients a property until they are pre-approved for a mortgage. Banks are a lot stricter than they used to be. I also find that once clients are pre-approved it really is a reality check. For example, I had clients that wanted to look at 400K houses but they were only pre-approved for 250K. My best advice is to get pre-approved so you know you can get a mortgage, and know what home price you are looking at before you even start. Good luck.

CCgirl has good advice. Pre-approval is a good route to follow for the OP.
In addition, I would suggest that the OP consider waiting to purchase another property. Also, buying real estate with a DBF brings on another level of challenges for which an attorney should be consulted.

 

[StitchesGr8Fan]

Dont worry, we would get preapproved. And we won't buy anything together unless a wedding is also being planned. And there will be a prenup to protect us both! I just don't want to try to get preapproved if there is no hope.

 

[bumbershoot]

If your situation is that good, and you really don't think you can sell the townhouse, once you guys are engaged and set a date and have everything legally covered, why not try?

My brother and sis in law have a mortgage on their house and just bought a condo closer to her workplace. Getting that loan took some work (it's only 20-30 minutes away, depending on traffic, so it's not a vacation home, etc etc, and the actual loan was complicated) but they got it.

 

[ccgirl]

Dont worry, we would get preapproved. And we won't buy anything together unless a wedding is also being planned. And there will be a prenup to protect us both! I just don't want to try to get preapproved if there is no hope.

I guess you will never know until you try.

 

[GrnMtnMan]

It's absolutely worth a try.

The rent you get from your townhouse should cancel out the mortgage you pay on it, so you should qualify.

But you'll likely need to do this with a mortgage banker/broker, not with a customer service rep in a a bank branch. In the bank, if your underwriting profile doesn't meet within the narrow boundaries of that bank's current underwriting, you'd get denied. A broker/banker will be better able to shop around and find a willing lender.

If you don't know a broker, ask a Realtor for a referral. They're in the business of selling houses, so they usually know which broker/banker will help you out.

 

[StitchesGr8Fan]

Maybe I'll ask for a referral from my real estate agent. Thanks for the ideas!

 

[jgates]

If your debt to income is within the banks guidelines, you probably would be fine. You indicated your income is double what it was when you purchased your townhouse - so you probably have a pretty low debt to income ratio right now.

But you will need to go thru the process to determine what you can get.

 

[dreams91]

we were in the same boat. the lender told us that they use 75% of the rental income because they assume it could be vacant 25% of the time (even though we could show that we had a lease). we qualifed no issues. good luck.

 

[Tinkerbelle99]

Another Realtor here...you have gotten some great advice. i just wanted to reiterate that getting a mortgage on a second home can be difficult due to stricter guidelines but not impossible. I strongly recommend seeking out a mortgage broker, as they can shop around and offer you more options. If you dont have referrals from friends/family, your realtor should have some contacts for you.

typically, for a second property mortgage, you will need to show cash reserves that would cover both homes for approximately 6 months time. also your debt-to-income ratio would need to be 'reasonable'. and then there is the obvious of having to have solid credit. a broker could obviously explain these items in more detail.

definitely get pre-approved, in this market few Realtors will take you out on showings with out it. as was mentioned, pre-approval really opens the buyers eye on what they can truly afford.

good luck!

 

[StitchesGr8Fan]

Good tip on the 6 months of reserve $ for both mortgages. I think we will try to get that + the down payment before we apply (guestimating what we would feel comfortable spending on the second mortgage).

 

[sookie]

If you have no late payments on that townhouse, good credit, and your situation is as good as you say, there is no reason you wouldn't be able to buy a house. I am a loan processor, and we have many customers who own other houses that they just can't sell right now. The only glitch would be if you have an FHA loan on the townhouse and want an FHA loan on the new house. You can only have 1 FHA loan.
Other than that, I see nothing that would prevent you from getting a mortgage.

are you sure that is true? we are going through the mortgage process right now. we are approved for an FHA again because we had to relocate.

 

[MinnieForMe]

As long as you have good credit, adequate salary and perfect debt/ratio I don't see you having a problem. We have all of the above and our mortgage went through in three weeks.

 

[HHSTigerFan]

In the process of doing a refi on our house, approved contingent on the appraisal.. We need it to appraise at $149K, 2 recent comps I have found in our area are two houses that sold for $130K and $139K and they are both about 1200 SQF, our house is 1800 SQF.. condition of the 2 houses are the same as ours..

Is the appraised value based solely on comp values to the point that we shouldn't worry???