Home Buying in 94110>Question Details

Lance R King, Real Estate Pro in San Francisco, CA

Would love to hear an intelligent answer from a lender: a buyer who telecommutes most of the time wants to buy 90 miles from his office. Why?

Asked by Lance R King, San Francisco, CA Fri Aug 6, 2010

can't he?

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Answers

11
That shouldn't be any problem. All you need is a letter of explanation, preferably from your boss or HR noting that your income will not be affected.
0 votes Thank Flag Link Tue Nov 26, 2013
Maybe the lender is suspicious that the buyer doesn't plan on using it as his primary residence. But more and more people telecommute. That concern certainly could be addressed and eased--showing no other home owned, some documentation regarding the telecommuting, etc.

Hope that helps.
0 votes Thank Flag Link Fri Aug 6, 2010
Don Tepper, Real Estate Pro in Fairfax, VA
MVP'08
Contact
" As a follow up another bank was willing to make the loan but their reserve requirements were so ridiculous it effectively killed the deal."

What type of loan was he trying to get? If he was trying to get an interest only loan, then the reserve requirements would be much higher. It also sounds as if you are trying to get a jumbo loan; is the loan amount higher than $729,750? I guess I should have picked up on that by you saying they were approved for over 1 mil. GSE guidelines won't make a difference since it's non-conforming if we are talking over $729,750 in SF county.

If it's a loan amount of $729,750 or less in SF county and the loan to value if 96.5% or less for FHA or 90% or less for conventional, there should be no issues with the distance and reserve requirements are not strict; in fact, for FHA they are non-existent.

If it's a true jumbo, you should definitely see a broker that has access to portfolio lenders that specialize in this type of scenario. Walking into B of A or Wells is not going to be the thing to do with outside the box loan scenarios.
Web Reference: http://WeFixRates.Com
0 votes Thank Flag Link Fri Aug 6, 2010
This is from wells fargo, too. As a follow up another bank was willing to make the loan but their reserve requirements were so ridiculous it effectively killed the deal.
0 votes Thank Flag Link Fri Aug 6, 2010
The easy answer is: He CAN buy it.

There may be a lender or 2 out there that will add this overlay to guidelines, but there is no actual distance guideline for Fannie, Freddie or FHA. This is exactly where a good broker's strength comes into play. All you really need for this is a letter of explanation, a lender without overlays for this and a knowledgeable loan officer. With what you describe this should have been a slam dunk.
Web Reference: http://WeFixRates.Com
0 votes Thank Flag Link Fri Aug 6, 2010
Interest rates at record lows and still the market hasn't picked up. (News today)

This is why! What a ridiculous criteria. One has to wonder if the person that decided that was a neccessary criteria has never been to the western United States. In Washington DC you can cross 3 or 4 states in 90 miles, here it's just the run to Sacramento from the San Francisco.

Is this a GSE requirement?
0 votes Thank Flag Link Fri Aug 6, 2010
Jed Lane, Real Estate Pro in San Francisco, CA
MVP'08
Contact
1. See if this lender will accept explanation letter from borower and a letter from the employer, stating that he telecommutes and that he only needs to be in the office X number of days per month.

2. See if he would still qualify if you treat this as a second home and use his current apartment as his primary

3. Try a different lender

If you are working with a mortgage broker, he or she should be able to switch lenders.
0 votes Thank Flag Link Fri Aug 6, 2010
sorry, just realized part of the question didn't get in.

Buyer can't get a loan because the property is more than 75 miles from his office
0 votes Thank Flag Link Fri Aug 6, 2010
This buyer is well qualified - pre-approved for over $1M. No other homes. The sole disqualifier is distance.
0 votes Thank Flag Link Fri Aug 6, 2010
Why what? What is your question?
0 votes Thank Flag Link Fri Aug 6, 2010
The answer requires more up front information. Does the borrower have another home or multiple homes? Does the borrower have a lengthy tenure with their company and can they demonstrate that they telecommute or do they travel extensively for their work? Are there specific circumstances for the 90 mile distance for instance, a special needs child that needs to see a specific doctor or can only go to a specific hospital for their health? A medium distance for a couple that works in two cities, for instance San Francisco and Sacramento? There are many details that need to be addressed before a lender can just throw out an answer to you. I have helped people that have moved from large cities that now desire a small town to live and have a flexible schedule that will allow it. I helped a guy that worked in Phoenix and his home was in Chino Valley (about 2 hours north of Phoenix), he grew up in L.A. and did not want his kids growing up in a larger city so he commuted daily. That example is not the same as what you propose but there are some common threads, you need to tell us more for the best advice. Good Luck.

Matt Puzz
Licensed Loan Originator
Amerifirst Financial, Inc.
602-410-9333
Apply Online: http://www.mattpuzz.com
Web Reference: http://www.mattpuzz.com
0 votes Thank Flag Link Fri Aug 6, 2010
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