I'm looking to get into a larger home.

Asked by AJ, Glendale, CA Thu Mar 12, 2009

However, I'm currently upside down on my current home approx $100k and have little cash on hand. What options do I have ?

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M.D.J’s answer
M.D.J, , Los Angeles, CA
Thu Mar 12, 2009
Not much...unless you can qualify for two house payments because you don't have the 25% or 30% equity for FHA or Conventional financing to count the rent.

Any further lending questions feel free to contact me and good luck to you.
0 votes
Keith Sorem, Agent, Glendale, CA
Thu Mar 12, 2009
AJ
The truth is that markets go up, and they go down. I would encourage you to sit tight, enjoy your home, values will turn around eventually.

OTOH, if you wanted to be creative and try a short-re-fi, or something like that, you might be able to do it, but I don't see how you can also save up enough for a 20% down which is what you'll need to avoid paying purchase insurance.

Feel free to call if you have more questions.
0 votes
Mario Villag…, , Burbank, CA
Thu Mar 12, 2009
I've had a lot of clients in this situation. The nice thing is that you are in Glendale and in Glendale you can get a good amount for rent. If you are able to rent your house and break even then there's still another obstacle. Since you don't have 30% in equity in your current home and since you don't have cash then you might have to go FHA. I believe FHA will now consider both mortgage payments to calculate your debt to income ratio and not consider what you collect in rent. I might be wrong and if they do consider the amount you collect in rent it may only be 75% of the rental income. You might want to talk to a lender that specializes in FHA as well as conventional. Good luck. If you need to be referred to a lender feel free to contact me.
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