Home Buying in 21078>Question Details

Jentabeling, Home Buyer in 21078

I have an FHA loan in MD, the payoff is what I could sell my home for. Can I rent and get convential loan with 5-10% down (good credit)?

Asked by Jentabeling, 21078 Wed Dec 14, 2011

What is the minimum downpayment on convential loan?
And what is the minimum amount of cash reserves (I have seen 2 months mortgage payments must be available as cash reserves)?
When qualifying for the new loan how is the FHA loan treated? Do I need a signed lease? And does that mortgage amount count against me for qualifying for new home loan?

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Answers

5
Jen!!!

Both answers below are good. It is really a matter of how the numbers will play out. In short, yes it is possible. Escrow reserves can be variable, as high as 6 months depending on risk. More than likely a signed lease will be required. Yes, the mortgage payment will be accounted for in your debt to income ratio.

Feel free to call me or email me with any additional questions you may have.

Chris Kirkendall
410-937-7855 cell
chriskirkendall@comcast.net
Prudential PenFed Realty
1 vote Thank Flag Link Wed Dec 14, 2011
Jentabeling,
A lot will depend upon why you are moving. Why are you?
0 votes Thank Flag Link Thu Dec 15, 2011
Jen,

You can do 5% all day long. Just closed one yesterday. 3% is possible but the payment is much higher and there are less banks that will lend on that scenario.
Cash reserves are determined by Fannie Mae. The loan needs to be run thru DU which is Fannie's automated UW system. Please note that lenders may have additional restrictions over what Fannie allows. These are called overlays in the business. I would plan on at least 2 months reserves for the new home and 6 months on the now investment home. Yesterday I saw a bank that required 6 months on each home which is what I was talking about in regards to overlays. Also unless you have 30% equity in the property rent will not be allowed to cover the mortgage payment. So you would have to qualify with both mortgage payments. Hope this helps please let me know if you need more.

Thanks,

Brent Mendelson
Senior Loan Officer
Monarch Mortgage
600 Jefferson Plaza, Suite 400
Rockville, MD 20852
240-403-1970 Direct
301-412-0259 Cell
http://www.monarchmtg.com/bmendelson
http://www.brentmendelson.com
nmlsr#111407
0 votes Thank Flag Link Thu Dec 15, 2011
Jentabeling-

You actually purchase a loan using conventional financing with as little as 5 % down. Your current mortgage would could against you in qualifying but you would be able to offest if you have enough equity in the home and could document you have a renter lined up.

Let me know if you have any questions

Samson Doyle
443-864-2391
sdoyle@americahomekey.com
0 votes Thank Flag Link Wed Dec 14, 2011
I have seen 10% down loans. There are lots of different programs available. The best thing to do is speak to a loan officer. I have an excellent person right here in Bel Air. Her name is Patty Leuckert. Please let me know how I can help further.
Paul Gillespie
Exit Preferred Realty
443-852-1632
0 votes Thank Flag Link Wed Dec 14, 2011
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