jabksufan asked:
I am trying to get a loan on a new property, but I still have a small mortgage on my current home. I don’t want to lose out on the new house, but with some past credit issues (6 & 7 years ago issues), I cannot find someone to approve me for a loan while I still have a mortgage. How do I sell my current home and then “see” if I can get approved for my new home?
Mike
I am trying to get a loan on a new property, but I still have a small mortgage on my current home. I don’t want to lose out on the new house, but with some past credit issues (6 & 7 years ago issues), I cannot find someone to approve me for a loan while I still have a mortgage. How do I sell my current home and then “see” if I can get approved for my new home?
Mike
First of all, you can get pre-approved for your new loan “contingent” on selling your home. You can also make an offer on the new home with the same contingency. You might also look into a “bridge loan” where your first mortgage is paid off, funds are dispersed for your new loan, and when your house sells the proceeds pay the total loan down. You usually have to have some equity in your current home to make this work, and of course, you need to ratio in.
Hope that this helps.
There are ways to qualify for this without you selling your currnet home. But, if you are out of the debt-to-income ratio that is require you may have to creative on that loan. You cna get pre-approved, with money down form your other property, but to do this there is other types of information that is needed to give you the best advice.
The stuff from 6-7 years ago should not affect you to bad unless it is being re-aged. Email it you want the truth on how to do this.
you can get preapproved on a mortgage without buying a home. A bank will preapprove you based on a purchase price, and then wait for you to find the home you want to buy. From the time you send in a purchase contract, it will generally take 2-4 weeks to close. See a banker or mortgage broker who will conditionally approve the mortgage based on the other mortgage having been paid off. that way, the current mortgage payment will not count towards your debt to income ratio
The problem must be that your available credit (the amount you can borrow from a lender) is not large enough to cover the amount of the mortgage on your current home and the mortgage on the home you want to borrow. It sounds like you’ve already looked into this and been told that the problem is a credit issue from 6-7 years back. That doesn’t sound right and I would ask for more info on the problem.
You are correct in wanting to sell your home first before buying another home. This is a smart way to go, especially if you are in an area where homes don’t necessarily sell quickly.
While you are selling your home, you can get fully approved for a mortgage on your new home and just schedule your closing for your new home just after the closing of your old home. This will allow the old mortgage to be paid off before you close on your new home and get your new mortgage. Your mortgage professional can arrange this for you. It should be no big deal and it is done all the time.
At Quicken Loans we have what we call “Power Buyer” approval. This means that you are guaranteed that your home loan will close as long as the property gets a satisfactory title and appraisal, and your financial situation remains the same. It is much stronger than a pre-approval.
Using Power Buyer (or something like it from another mortgage company), you know exactly how much mortgage you can qualify for and that you will qualify once you are ready. In other words, you will never have to “see” if you can get approved for your new home, as you put it.
Getting fully approved should solve your problem. I would definitely look into it with your mortgage professional.
Good luck with your situation!