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Claudia, Home Owner in Murrieta, CA

I have a home that I can refi under the Harp program I'm thinking of refi'ing the house renting it out and buying new. what are the?

Asked by Claudia, Murrieta, CA Thu Mar 15, 2012

guidelines ? What are the banks looking at when you want to purchase a second home...how long do we have to wait to buy a home? do we need to get a renter in the house first?

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Murrieta Buyer’s answer
I just refinanced on my 1st home using the HARP program and we have made an offer on a short sale property. In our situation, I qualified for both loans so its not too much of a big deal. We are excited but the short sale has taken 6 weeks so far and no end in site. All I can say is get the ReFi done ASAP, then when you have your new mortgage payment, see a new lender about your purchase amount to determine what you can afford based upon your circumstances. Remember, always get 3 quotes for a loan. I typically get a few big banks and a mortgage bank. Once you have that ready research what you can lease your 1st home for and if you can cover that note now with the new mortgage. Then enjoy your shopping. I know for us, we are buying in West Murrieta and it is HIGHLY competitive. The home we picked was on the market for 48 hours and had 10 offers. We offered 8% above asking and won. We were lucky. Things are selling fast and inventory is low so I see prices slowly climbing up. I think its the best time to buy. Under 4% on a 30yr isn't going to last much longer.

Good luck!!!!
0 votes Thank Flag Link Wed May 30, 2012
HARP requires that the home be owner occupied to qualify, however HARP 2.0 does not. The new HARP 2.0 should be rolling out this month. So, I would find a local lender to help you with this since not all lenders have their guidelines in place yet.

The HARP 2.0 guidelines: (The major ones anyways.)
* Require that you purchased your home prior to June 1st of 2009
* No mortgage lates within the last 6 months and a max of 1 in the last 12 months.
* Only applies to Fannie Mae or Freddie Mac mortgages.

If your goal is to buy a new house and rent out your existing home you can still get financing but you need to be aware of some things.

If you can afford and qualify for both payments you will have a much smoother and easier time getting financing.

If you cannot afford both payments and need the rental income on your previous home, the lender per FHA and conforming guidelines will require that you have at least 20% to 30% equity depending on who you use for new financing. VA also has different requirements for this if you qualify VA.

Per what you mentioned above I don't think this will be the case since you are looking at doing a HARP loan.

You should talk with some local loan officers and see what your options are. I may have missed something or he/she may have a better idea or a good plan for you.

Just make sure you ask a lot of questions and I wish you luck.
0 votes Thank Flag Link Thu Mar 15, 2012
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