Home Buying in Clinton>Question Details

Bullockrenee, Home Buyer in Lake City, TN

We have found a home we want to purchase but still have our first home. We have a family interested in doing a lease purchase.

Asked by Bullockrenee, Lake City, TN Fri Feb 8, 2013

How do we qualify for the new mortgage while still responsible for our current one?

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This is risky business, They may do well but you could end up with $20K of damages and a payment. I was in the same situation and finally have a contract on my home and now can qualify for a loan to purchase a new home contingent on the sale/ close of mine. Where is your house I may be interested?
0 votes Thank Flag Link Tue Jul 1, 2014
A lease purchase needs to be done right, the buyer should quailify for amortgage but need the time to save for down paymebht and closing costs which are credited them through the lease purchase. they should put down a deposit for the purchase part. It should not be longer than a year. The bank usually will count 75% of teh rent towards you income but counts the mortgage and taxes etc towards your liabilities. make sure the leas epurchase outlines what you expect for them to purchase and what happens after a year if they do not complete the purchase part. It could really hurt in a year if they dont purchase and you did not do the contract correctly.
0 votes Thank Flag Link Fri Feb 8, 2013
Even if you have a signed lease, you still must have equity in the home to be able to use 75% of the lease amount to offset the mortgage payment.

For an FHA mortgage, HUD requries at least 25% equity in the current property.

VA and Fannie Mae/Freddie Mac, all require at least 30% equity.

The lender is required to order an appraisal to establish this appraised value. If the required equity is not there, then you cannot use any of the lease to qualify.
0 votes Thank Flag Link Fri Feb 8, 2013
Our current home is an FHA mortgage that we want to lease out. The home we want to purchase Im sure we would have to qualify for a traditional 30 year mortgage because I don't know if we can have two fha loans?
Flag Fri Feb 8, 2013
The answer is maybe. If you have a lease in place when you go to the bank the rent per month offsets some of your mortgage payment but it still depends on your income to debt ratio and credit score. Good luck! Steve Larimer Knox Realty stevelarimer1@comcast.net
0 votes Thank Flag Link Fri Feb 8, 2013
You can quailify. I would talk with your bank about your situation to see if you need to sell your current home before purchasing or if you are able to purchase your new home with out selling your current home.
0 votes Thank Flag Link Fri Feb 8, 2013
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