Real Estate Professional / Prestige Realty
Bianca Bennett / 602-570-7898
The bottom line is you will need to qualify with both your current mortgage payment and the payment for your new home. Since you are underwater, you will not be able to use the rental income from your departing residence to qualify. Some lenders may be be concerned with your loan since you mentioned you are underwater on your current home - that is not a problem for us. We are closing a large number of transactions each month for clients in your situation.
The key is that not all lenders are created equal with regards to debt-to-income ratios and how they appoach these transactions. We take a common sense approach as we are a direct lender.
Please let me know if you'd like to dicuss the details of your situation.
You already know banks have tightened the reigns on their lending guidelines, however there is still plenty of lending going on to qualified buyers...funny in retrospect, that banks ever strayed away from that model, but staying on point with your question...
Assuming your current loan is in good standing (no late payments during the last 12 months at a minimum) and your credit score is 640 or above and your income inclusive of 75% of the rental income will qualify to make the mortgage payment on the new primary residence and the soon to be rental property loan...and it wouldn't hurt if your last name is Kennedy, Rothschild, Disney, Gates (joking); you have an excellent chance of qualifying for a new loan on your next home and I commend you on taking this opportunity to capitalize on this market. There will be other guidelines that could come into play and really you should speak with an experienced Mortgage Banker, please note; not the BANK where you have your savings and checking accounts.
I would go into detail here and cite several examples of deals failing in the final days prior to funding, but I only have 3990 characters left at my disposal. Just accept that you will be better served by a mortgage banker...most will put your best interest first.
I want you to have the direct number to 2 such lenders...they have each gone the extra mile for clients of mine and neither of them stuff extra fees under the rug if you will. They absolutely will take care of you with honesty, integrity, and genuine concern, too.
In no particular order here...Janie Shelstrate @ The Lending Company: (602) 679-8735 and Lisa Mecl @ WJ Bradley: (602) 290-2177.
Call either or both of them and you will have that piece covered! Perhaps they may even know a fairly good Realtor to refer your way when you are at the point of zeroing in on a home.
Millionaires will be made in this market, so get focused and get going...and good hunting!
The new lender (in my experience) won't factor in the short amount and add it to your new loan. For one reason they want to be in the best possible position on the new loan and appraisals right now are usually not very "generous". But if you can qualify for both and you need a larger home or a home closer to work it should be just fine. If you decide to short sale the first home after your try to rent it out for a while then that may not be a problem... you should always check with an attorney on this and a tax accountant familiar with this also.
Ron & Brenda Cunningham
West USA Realty
** Recognized in the Phoenix Business Journal as "One of the Top 50 Realtors in the Valley"