Financing in Austin>Question Details

Lisa, Home Buyer in Little Elm, TX

How does HomePath Financing Work for Purchasing Second Home?

Asked by Lisa, Little Elm, TX Fri Jan 7, 2011

We want to purchase a new primary home. We are currently renting out our current home (financed by FHA). Does HomePath count the rental income or do they only see the loan as a second home and require 10% down? I'm trying to see how much we'd have to put down and if they would count our rental income. Thanks!

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Hi, Lisa.
I think the best way to get you an answer is to pass you along to my HomePath expert. Get in touch with me by email - john@crowehomesaustin.com or 512-459-3400 and I'll make the introduction.

Cheers, John
0 votes Thank Flag Link Mon Jan 10, 2011
HomePath allows for financing primary residences, second homes and investment properties. Your situation sounds much more like an investment property than a second home. If this is the case, you need to be careful as the lease is no longer acceptable. Fannie Mae and Freddie Mac have recently changed their approval guidelines for rental in the case of investment properties and you will need to show some experience, i.e. 2 years as a landlord, on your tax returns.
Web Reference: http://www.bankerdoug.com
0 votes Thank Flag Link Fri Jan 7, 2011
Thanks John! So rental is apart of the review process...are there any particular guidelines they follow? Our renters have been renting for 1 1/2 years (signed a 2nd year long lease). They do pay under what we pay for mortgage (they pay $1200 we pay $1360 but includes taxes, insurance etc). If they didn't count rental income, it might hurt our chances.

Our income - $7000/gross
(husband is w2 @ $45k for last 2 years, I am self employed but have worked same line of business (web designer) since 2001 -show no income 2009 b/c I had a baby and stayed home with her, then started contract work from home, I will file tax returns for 2010 - I made $40k gross and will have for 2011 - signed a year long contract for $50k for 2011 on Dec 1, 2010 - they direct deposit same amount every month)

Debt - $345/auto loan, $265 student loan and $60 credit card (only have about $1600 left to pay on and can be paid off)

Credit - I was at 737 but 2 errors on my report from last month dropped me to 600, I have disputed and working on getting it removed and back up. My husband is at 654. We don't plan to purchase until end of the year/beginning of 2012, so we still have time to get it up. My husband took care of his baddies, so his score will only go up.

Down Payment - $10-15k

Reserves - $5-7k

We were hoping to find a home for around $215-225k

What do you think of my chances?
0 votes Thank Flag Link Fri Jan 7, 2011
Hi, Lisa.
I spoke with my resident HomePath expert. Here's the rundown: rental income will be part of the review process. Need to show reserves/assets on all transactions, though the amount of reserves really depends on underwriting (Fannie/ Freddie automated approval system). Down payment will not increase if you qualify for the HomPath Program.

Key points:
Max LTV (loan-to-value) = 95%
Max DTI (debt-to-income ratios) = 50%
Minimum Credit Scores = 660
Maximum Seller Contributions = 6%
No Appraisal Required
No Mortgage Insurance Required

Good luck!
0 votes Thank Flag Link Fri Jan 7, 2011
Yes, 75% of the rental income can be counted, as long as you have a signed lease, can provide proof of receipt of the 1st month rent and security deposit (if applicable), 30% equity in the home, and a minimum of 2 months payment reserves.

If I can be of assistance, please give me at call.

Lea Shaw
Pulse Funding of Texas, Inc.
512-266-3800
0 votes Thank Flag Link Fri Jan 7, 2011
Lisa,

I believe that Homepath will recognize your rental income. For the most accurate information, I recommend contacting a Homepath lender. In the DFW area, I have had great success with Cris Vento at Wells Fargo Home Mortgage. He can be reached at 972.393.4438 Cris has a great grasp on Homepath lending and will work hard to reach the right deal for you.

If you need assistance with the purchase of your new home, please call me at 214-215-8097.

Regards,

Greg Fowler
Keller Williams Dallas City Center
214-215-8097
0 votes Thank Flag Link Fri Jan 7, 2011
Hi, Lisa.

Our team works with an amazing Texas lender who specializes in HomePath mortgages. Her name is Cindy Swannack. She can be reached at 512-483-6092. She can answer all your questions!

Tell her The Nyland Team referred you.

Good luck and have a great weekend.
Gina Nyland, REALTOR, GRI
The Nyland Team
Prudential Texas Realty
0 votes Thank Flag Link Fri Jan 7, 2011
Lisa,

If you are planning to occupy the home you are purchasing, you should be able to get the loan for 3.5% down, you will have to prove the rental on the other home. I would be happy to answer any other questions for you or point you in the direction of some wonderful loan officers. Let me know if I can help!

Pamela Peck
Realtor
Keller Williams Realty
512-609-9877
pamela@kw.com
0 votes Thank Flag Link Fri Jan 7, 2011
For an accurate answer as it relates to your specific situation do visit with any qualified loan officer(s); after reviewing your overall financial information, a determination on qualification, how much, etc., can be made--also see link...
http://www.homepath.com/financing/index.html
0 votes Thank Flag Link Fri Jan 7, 2011
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