Unless you have the old house paid for or you can afford 2 mortgages forget this idea. Sell your current house and THEN with cash in hand buy the new one.

What happens if you can not sell your house? What happens if you rent and the renters do not pay the rent?

This market is dying. The summer is over. The buyers credit is effectively dead. Winter comes and buyers hibernate. You might be lucky and sell quickly. But what if it takes months or years?

There are 2.7 million foreclosures nationwide already in process. From 2010 to 2012 we have up to 7 million foreclosures to come. Sorry to say, it does not look like a good time to own 2 houses while trying to sell one. It may be a horrible time to sell a house. Although that varies a lot by area. Look at how many people have lost jobs. Friday may show us a 10% unemployment rate. Now it is 9.8%. Include those who are not counted as they do not collect benefits or check in at the unemployment office for job listings and those who only work part time and it is more likely about 17%.

I know you want to move. But please do the financially smart thing and only move if and when you can do so without any danger from your old house holding you down under water.

Marion,

When do you plan to occupy the new property? Immediately? In what sense is the lender calling the new home an investment property? Have you closed on the new property yet? (Sorry to provide more questions than answers!) It may be helpful to speak with another lender, depending on where you are in the process of puchasing the new property. Based on the information you have provided, it does not appear that the new property should be considered an investment property. I am happy to provide contact information for a lender if you feel that would be helpful. Any further information you can provide will help us provide more solid recommendations.

Warm Regards,
Julie Cain Cwynar
juliecaincwynar@gmail.com

Well, ensure that you tell the bank that it will be your primary residence. Or go somewhere else. Your rates could be higher and they will definitely demand a much higher down payment. If your plan is to sell your current home, then say so. If they still won't budge, go elsewhere and ensure that they are a local lender or credit union.

Hope that helps,

Terrence Charest