I completely understand your concern! Get a really excellent home inspector and provide him or her with all the reports provided by the home seller. The home inspector during inspection should give you his or her opinion if you should have a full environmental study.
There is no simple answer to this question. It all depends upon your risk tolerance and your financial goals. The riskier the investment the higher the potential return in general. You need a realtor who can work with you to establish metrics for evaluating properties and then use those to find the best investments for you.... more
Your last question is key. The rules regarding rental income changes from lender to lender. You can find some local banks that will consider rental income as soon as the lease is signed. Or, most national lenders have strict guidelines for a minimum of 6 months.... more
I currently have a condo in Jefferson Park that I bought in 2008. I originally got the loan through BoA using their "No Fee Mortgage Plus" program. I didn't find out until very recently that the loan had LPMI - this was never disclosed to me verbally nor was it part of any of my loan documentation. The value of my condo has dropped sharply since I bought it, too. I'm probably about 70k underwater. This, combined with the LPMI on my loan, made it very difficult to find anyone willing to refinance. Eventually, BoA was willing to do the refinance in October 2012, but I had to agree to an FHA loan with a 4.25% rate - higher than what I was hoping for, though it still saved me about $300 a month versus my old mortgage.
Now, I'm looking to move. Ideally, I'd like to move into a single family home in the North or Northwest suburbs. I've crunched the numbers, and I think I can afford a home up to about $600k. My credit rating is excellent, I've had a stable job for almost 10 years, and I have enough cash at hand for around a 10% downpayment with about a year of PITI. I think selling my current condo is pretty much out of the question, though. I'm fairly certain that I'll need to rent my current condo. So, with all of this in mind, I had a number of questions:
- Are there lenders out there who would refinance an existing 4.25% FHA LPMI loan down to 3.25-3.5%? Or does the LPMI really preclude this from being a realistic option?
- In order to get the rental income for my current condo to count towards my monthly income, what do I need to do? I've been trying to find some information about this on the internet, and I'm reading a lot of conflicting information. Some say I need a signed lease with at least 1 year's worth of documented rental income. Others say I just need a signed lease with a security deposit. Most, however, agree that only a portion of your rental income gets counted. Usually 75%. What's the real story here?
- Assuming that I do qualify for a $600k home, that puts me into "jumbo loan" territory. I've read that you'll typically get much better rates if you split that into two different loans with each loan below 417k confirming loan limit. What are the typical "hidden" costs associated with this sort of loan arrangement over a jumbo loan? And is it possible to get these loans without a PMI if I have less than 20% down? I've heard of things like SFMI, SPMI, etc... but I don't really know how to qualify for them.
Thanks in advance to any who can help answer any of these questions!... more
Amanda, when you submit for short-sale approval it must consider the second lien in the HUD-1; the primary loan does not stand alone when there is a second mortgage lien on the property. It is always best to submit for the second lien approval at the same time you submit for the primary loan. The second lien will normally take 10% unless there is a HAFA involved which now pays up to $8500. Here is the solution that may work. If you have a purchase agreement for the last agreed short-sale amount resubmit it to the bank with an updated HUD-1 that includes the second lien's agreement to take the $2600. This should solve the problem.
Trying to drop the price by the demand of the second lien requires that you provide proof of the new value and that holds little water in the first 90 days after the BPO on the property which was used to approve the Short-sale offer.... more
If you are prequalified with your Lender and establish a strategy with your Realtor, you shouldn't have a problem finding a home. You have to look at properties you can afford and act quickly once they become available.... more
There are advantages to buying or selling in any season. For example, there may be more listings in the summer and spring, but you may be competing with more buyers if you submit an offer. In the winter there may be fewer listings, but less buyer competition. Feel free contact me to discuss further.
Sales and Leasing Consultant
Goldberg & Perl, Inc.
844 W Armitage Ave
Chicago, IL 60614
Office: (773) 477-9700
Fax: (773) 549-1956
You write an offer to the seller. If they accept, they submit your offer to the bank with their harship package. If the bank feels it is to their advantage to sell it to you for less than the outstanding note, rather than paying the costs of foreclosing on a property, they move forward with your offer.
It is a little more complicated than that, but that's the process in a nutshell.
Email or call me if you want to discuss a particular property or if you want to setup a search.