Financing in Glendale>Question Details

Laura Burns…, Home Buyer in Glendale, AZ

Is it possible to buy a second home if you have modified the loan on the first home?

Asked by Laura Burns DeNigris, Glendale, AZ Wed Jun 8, 2011

I would like to move closer to where my husband works, which is about 70 miles round trip, my boys will both be in high school in the fall and we thought this would be a good time to do this. If we rent out our home and even if we need to pay part of the mortgage on the first, we can still handle it financially. The first home loan was modified about 6 - 8 months ago.

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You are correct if we are able to, this would be our primary residence and we would rent out our current home. We have been current on all payments after the modification, although it is a little different because previously we were on a plan where our mortgage company took payments automatically every 2 weeks, they cannot do this anymore, they can only take it out monthly. In any case we have been making our payments on time.
0 votes Thank Flag Link Fri Jun 10, 2011
The first thing I would like to clarify is that if you are planning to move into this new home, it is not a 2nd home. It will be your new primary residence. This makes a world of difference when trying to get pre-approved.

Now back to your question. In my experience most loan modifications happen only after the homeowner had been late on payments. Banks typically do not approve loan modifications for homeowners that are still paying their mortgage. So if this is your situation, then chances are that your credit is hurt and you may not qualify to buy a new home.

However each case is different and your best bet is to talk with someone that can walk you through the whole process. It shouldn't cost you anything to check it out.

Hope this helps. Good luck!

Jose Dias, REALTOR
(623) 418-5700
0 votes Thank Flag Link Fri Jun 10, 2011
From my experience, I think there is a chance, given the facts you provided, though it may not be easy. I recommend that you contact your current Buyer's Agent or consider one of AZ Buyers agents/AZ Mortgage Brokers that answered your inquiry to get the names of local Mortgage Brokers that can look at your specific situation to see if there is a way to make it work. Having a tenant under contract may also help, but ask an experienced lender.
0 votes Thank Flag Link Thu Jun 9, 2011
Hi, Lauradee. Usually you have to wait 12 months before you're eligible for a new mortgage. And within that time period you can have been late on any of your current mortgage payments.
0 votes Thank Flag Link Thu Jun 9, 2011

A loan modification is a lender's attempt to avert a financial disaster and is based on the borrower demonstrating the need for this exception. Unless you can demonstrate a positive change in your financial situation it's unlikely that you will be considered a good lending risk by the bank.

On the other hand....anything is possible. But it may be best to explore other options.

Good luck,

0 votes Thank Flag Link Thu Jun 9, 2011

Typically the best way to progress with circumstances like yours is to meet with a good, experienced Mortgage Banker/Broker. A good mortgage person will be able to provide you with options, you may or may not like them but it's worth exploring. A good mortgage person will be on your team to find options that can accomplish the goals you have set.

What location are you wanting to end up near?

Arizona Homes for Sale by a Guy from Iowa
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0 votes Thank Flag Link Wed Jun 8, 2011
Originally when we modified, which started over 3 years ago, yes, it was a hardship. The modification was completed in Oct. of last year. In March of this year, my husband got a raise, we got our income tax and paid off some bills, so the issue has been resolved and we are back on track. I tried to get pre-qualified with a lender and they said that they are not qualifying anyone with modifications that there are really no rules for financing loans for 2nd homes when you have modified the 1st. I am not sure if this can be done (or what is required to get a 2nd mortgage)
0 votes Thank Flag Link Wed Jun 8, 2011

The answer is "it depends." It is determined on a case-by-case basis. The overall concern of the lender is what was the hardship when you modified your loan and has it been resolved. If you situation is the same, it may be difficult to get a loan. If the issue has been resolved and there is no longer a hardship, you would postentially be able to qualify for a loan. We have done many loans for people who have been in this situation.

Feel free to follow up with questiosn at 602-522-9494 ext 201.

Best regards,
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0 votes Thank Flag Link Wed Jun 8, 2011
Lauradee, Yes it is possible to buy a second home. I would check with a lender to see if you qualify for a second home loan. What was the reason for modifying the loan on the first home. Hardship???
0 votes Thank Flag Link Wed Jun 8, 2011
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