Financing in 95138>Question Details

Albert, Home Buyer in 95121

Buying 2nd house & want to refinance the first house. Would the refinance cause issue when apply for mortgage on the 2nd house?

Asked by Albert, 95121 Wed Feb 13, 2013

I'm in a short-sale contract for my 2nd house (still waiting for the bank for approval). I'm thinking of refinance the mortgage on my first house (no cash out, just to get the rate down a bit). Will the refinance cause any issue for me when apply for the mortgage on the 2nd house?

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Roswell & Bill bring up excellent points.

Further, the refinance of your current residence will need to be aware of the financing you are trying to obtain for the purchase - so the new payment on the home you are purchasing will need to be factored into you qualifying for the refinance (you probably would be able to complete the refinance before you obtain the purchase loan, but the new purchase loan payment would still need to be considered). I assume if you are able to qualify for a purchase loan while retaining the existing property that you would also qualify for a refinance of your existing property when considering the new home's housing payment, but it is definitely something that the underwriter on both transactions would want to know about. You can do both transactions with the same lender to cut down on the amount of paperwork & credit checks needed, or you can use two separate lenders, one for each mortgage transaction.

Shane Milne | Lending in all 50 states | NMLS #81195
shane@thebesthomeloans | 949-273-4161 direct
2 votes Thank Flag Link Wed Feb 13, 2013
Albert:

The short answer is No, it won't have a negative effect on the refinancing. In order to finance the purchase, you have to be qualified to carry both mortgages. If you re-finance to a lower rate, then your ability to carry both mortgages gets better. The caveat in this though is that BOTH houses qualify as your residences. If the old house is deemed a non-residence, then the answer will be yes, the purchase will adversely affect your ability to re-finance the already owned house because it will be considered an investment property at that point. Investment properties carry a higher rate than residence properties.

A full analysis of your situation and probabilities will require disclosure of your private information as if applying for a loan. You don't want to do that in a public forum. I would be happy to take care of your financing. You can call me at 408-639-0211 or email me at mitchell@handsonrealtor.com.

Mitchell Pearce
1 vote Thank Flag Link Wed Feb 13, 2013
Hello Albert, I have more questions to be able to advise you. Which house is the one your living in? It only takes a few dozen questions to qualify you in minutes for each scenario. You may qualify to buy your second home if it is going to be owner occupied with only half percent down payment and rent out your first home. You can do this even if your upside down on your current home as long as you don't have any late payments in the last 12 months.

I can go over what options you will have available to make an informed decision. I do Short Refinance principal reductions, HARP 2.0 refinance, streamline refinance and refinance so let's go thru the numbers of which refinance options you qualify for and also the new purchase with as little as half percent down with a minimum 580 fico score. It only takes a few minutes of your time to know what options you have. Here are some links to study and consider.

http://www.under640ficoscoreloans.com/Pages/Refinance.aspx

http://www.under640ficoscoreloans.com/Pages/HARP.aspx

http://www.under640ficoscoreloans.com/Pages/Conventional.aspx

http://www.under640ficoscoreloans.com/Pages/FHA.aspx

http://www.under640ficoscoreloans.com/Pages/CHDAPLoans.aspx

http://www.under640ficoscoreloans.com/Pages/HalfPercentDown.aspx

http://www.under640ficoscoreloans.com/Pages/ContactSheryl.aspx
Sheryl Arndt, Real Estate Broker - Sr. Loan Officer CA only
REO & Short Sale Specialist
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DRE# 01140252
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760-486-4225
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1 vote Thank Flag Link Wed Feb 13, 2013
Hi Albert,

That's a very good question.

If you are buying a an investment property, then you should not have a problem with your refinance.

If, however, you are purchasing a new Primary Residence, you need to refinance your current home as an investment property. If you don't, the Underwriter will see you just refinanced a Primary Residence & buried in the paperwork you will sign, you are agreeing to remain in the Primary Residence for another 12 months, so your Primary Residence loan will be denied.

In either case, if your refi results in lower monthly payments, you will be in a better buying position with lower debt-to-income ratios.

Please feel free to contact me directly if you have any further questions, I'd be glad to help.

All the best,
Ros

Roswell Moore, CMPS
Certified Mortgage Planner
480-422-5095 direct
http://www.ezAZloan.com

We are a Direct Lender, Mortgage Bank where we originate, process, underwrite, fund, AND SERVICE our loans, in-house, with FHA (starting at a 580 score AND still only 3.5% down), FHA Streamline refinance loans (NO minimum credit score, NO appraisal required) Go Green rehab loans, HomePath, Investor Friendly (10 financed properties), VA, VA Refinance loans (NO appraisal required on IRRRL loans), USDA loans, Jumbo loans, Conventional loans, plus, we allow Escrow Hold-Backs!


I
Web Reference: http://www.ezAZloan.com
1 vote Thank Flag Link Wed Feb 13, 2013
Hi Albert,

It is unlikely that a refinance to a lower payment, with no cash out, would cause any problems with your new purchase. It should acually help you to qualify. In today's higher level of scrutiny and qualifications, when you are approved for the short sale purchase, proper documentation of the refinance will be necessary for financing that purchase. However, based on what you ahve shared, you should be fine.

Let me know if I can help you by answering any further questions or a quote for either loan.

Bill Phillips
Home Loan Consultant
First Priority Financial - Silicon Valley
(408) 957-7600
http://www.TrustedLoanAdvisor.com
1 vote Thank Flag Link Wed Feb 13, 2013
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