Sunday David, Home Buyer in Fremont, CA

can I buy another property after I just finished loan modifying my primary home?

Asked by Sunday David, Fremont, CA Mon Aug 30, 2010

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16
Steven Ornel…, Agent, Fremont, CA
Tue Aug 31, 2010
Hi Sunday David,

[Set down soap box]

Personally, I would be very surprised if you made it through the purchase process unscathed, and if you did, there's something very wrong with the "system"!

[Remove soap box]

-Steve
3 votes
Pacita Dimac…, Agent, Oakland, CA
Mon Aug 30, 2010
Sunday --- how did you qualify for a loan modification? I was under the impression that loan mods were done for folks who can show that they are having difficulty keeping up with the payments (especially when the interest re-set for those who got ARMs), or who are experiencing reduction in income/increase in expenses.

If you were financially in trouble, how can you qualify to buy another property? Seems that if you are planning to get another loan, that your next lender will ask about your current property and also see the terms when the loan was modified. If the reason for the hardship was falsified, are you opening yourself up to mortgage fraud?

See: http://www.mortgagefraudblog.com/
2 votes
The Medford…, Agent, Fremont, CA
Mon Aug 30, 2010
Sunday David:

Correct me if I'm wrong ... but the only reason you get a loan mod is if you can prove you cannot afford your existing home … they normally do not approve loan mods without an extensive hardship scenario. And they seldom will lower your principle so that you can actually sell and come out clear.

So … I’m not exactly sure just how you plan on buying another home since you cannot afford the one you have now?

We need some more clarification please.
.
2 votes
Grace Keng, Agent, Santa Clara, CA
Tue Aug 31, 2010
No Likely! Do you have money under the mattress?

Grace Keng
RE/MAX RES
Web Reference:  http://gracekeng.com
1 vote
TC, Home Owner, Denver, CO
Wed Jan 22, 2014
I find it interesting that everyone is just complaining and not answering the question. I had a Mod done and it was still to high for me to afford. It would be cheaper for me to buy another property at today's rates and rent out my other property.
Lets do the math,
Old place with Modification $860 a month with $200 HoA fees
Buying another place with $205 HOA Fees $625.
People have reasons and situations that bring up questions. Without someone having to tell every detail of their life maybe we could just help them out by answering the question and not judge them.
0 votes
I totally agree with TC. People are so quick to judge and attack. If you're going to reply or answer someone's question, please do so without being so judgemental and understand that people's financial circumstances may change after receiving a loan mod... You don't know their whole story!
Flag Tue Apr 1, 2014
To those who did give advise, Thank you.
Flag Wed Jan 22, 2014
Alexander Gr…, Agent, San Jose, CA
Thu Aug 15, 2013
I was just looking through old post and I noticed yours. If you were not able to refinance at the time of the post, I can certainly help you out now. You can call me at 408-352-5147 or email me at AGreer@themortgageoutlet.com. You can check us out at http://www.TheMortgageOutlet.com. I will look at your situation and present you with some options.

Alex Greer
NMLS #1056079
0 votes
Claudia Mull…, Mortgage Broker Or Lender, Fremont, CA
Sun Jun 3, 2012
Loan modifications are looked at by the lenders the same way they look at a bankruptcy.

FHA will look at you in 2 years.

Conventional not for 3.
0 votes
FHA do not require seasoning for loan modifications. If the lender you are using has seasoning requirement then it's because they have investor overlays.
Flag Sat Feb 8, 2014
Mfranklin2360, Home Buyer, Griffin, GA
Thu Apr 5, 2012
I just went through this. I can not find a lender anywhere to help me. I am in GA. My credit is great. I was never late prior to the modification and I have never been late afterwards. I called my lender and asked them to help me with lowering my payments. They said sure we can help you. I thought it was like a streamline refinance. I am trying to purchase a home right now and I have been told I have to wait 36 months from the date of the modification before I can do anything. Everything else was okay. They waited until I was closing. I am very frustrated. If there is anyone that has a resolution to this concern. I look forward to your response.
0 votes
Tocopan, Other Pro, Fall River Mills, CA
Mon Feb 7, 2011
I don’t understand why it is so difficult for you guys to picture a situation where this question applies without any “weirdness”?
I’m not saying this is the original poster situation, but what about these 2 cases?

1) You bought an apartment 5 years ago for $190K and you owe that amount to the bank. Your mortgage is around $1400 monthly and you are having problems to pay that much. So you got a loan modification and lowered your mortgage to $900 monthly. Great, you can now make your payments. 6 months later you find out that the apartment next door is selling for $60K (a third of what you owe in yours), which would have a mortgage of, say $500. You won’t be able to sell your underwater apartment, but you could rent it for $900 so that it pays for itself, freeing your monthly income to buy something else, especially if it is going to be a lower payment than what you now can afford.

2) A couple bought an apartment 5 years ago for the same amount ($190K) and have a mortgage of $1400 monthly. They got separated 4 years later, the husband left and the wife has been struggling to pay the mortgage (because of the reduced income she now has). She gets a loan mod and mortgage goes down to $900 monthly. Great. Then 1 year after loan mod, they get back together (income returns to normal), and they have a kid so they decide they need a house (instead of apartment). They cannot sell super underwater apartment (is worth $60K and they owe $190K), but they could rent it for $900 monthly to pay for itself and try to get a house, which now could be around $160K (less than their apartment’s debt).


How could those work out?
0 votes
Sylvia Barry,…, Agent, Marin, CA
Sun Sep 12, 2010
Are you talking about 'loan modification' or 'refinance' of your primary home>

If you did a loan modification program (where the lenders modified your loan because you can no longer afford the current loan term'; then no, you will obviously not have enough asset or income to purchase another property.

However, if what you did was to do a regular refinance our old mortgage and get a new one with lower interest rate; then depending on the lender's criteria; you now might have a lower monthly payment on your primary home, leaving some money to invest into a new home.

Sylvia
Web Reference:  http://www.SylviaBarryRE.com
0 votes
Kenneth Young, Agent, Newark, CA
Tue Aug 31, 2010
You can buy another home if you have cash to pay off ,otherwise find someone , first borrower who has good credit and income to buy a home together. If you can pay 20% down for your second home or investment home, you will be able to get the loan. You must be co-borrower in that transaction. Try it for luck.

Kenneth Young
Licensed Realtor/ Mortgage consultant
USA Realty and Loans
0 votes
If the modification was done previously because a spouse was out of work or pay was reduced and now income has stabilized and you can qualify for a second home it should be feasible I would think?
Flag Fri Apr 6, 2012
FSBOsuccess, Home Seller, 28590
Tue Aug 31, 2010
If you could not afford the original payment on the existing property, how in the world do you expect to pay on ANOTHER one?
0 votes
Kamal Randha…, Agent, El Sobrante, CA
Tue Aug 31, 2010
Hello Sunday,

I agree with John here, so much comes into play when you are trying to purchase a new home after a loan modification. Not to say that this is impossible, but I suggest you speak to a reputable lender about your options :) Good luck..I know these home prices are soooooooooo tempting. lol

Kamal Randhawa
Broker
510-932-1066
0 votes
John Juarez, Agent, Fremont, CA
Tue Aug 31, 2010
The process of getting approved for a loan modification involves proving to your mortgage lender that you cannot afford the current payment on your home. That is why you are able to qualify for a modification. The lender is convinced that granting a modification is a means to avoid the possibility of a foreclosure because you have a hardship that makes it impossible for you to continue to make the payments originally called for in your mortgage contract.

Buying a new house involves convincing a lender that you can qualify for payments on a new mortgage. Unless you are paying cash, you will need a mortgage and you will most likely need to make a down payment.

If you have the cash for an outright purchase or down payment, how did you hide it from the lender who granted your modification? If you can qualify for an additional mortgage, how did you hide the fact that you have the ability to make such a payment from your loan mod lender?

Are you planning to sell your existing house and then buy a replacement house? By definition, you do not have any equity in the existing house. Where are you getting the cash for the new purchase and why do you now qualify for a loan when you were able to convince your mod lender that you could not afford that loan?
0 votes
We owe 400 thousand on our primary home but would list it for 520 thousand per our real estate agent the house will sell for this amount easily. Thus, we would have 20 thousand to pay him and 100 thousand to put towards a smaller home. How would this work in obtaining a new mortgage on the remaining balance of the home we would like to purchase for 260 thousand?
Flag Thu May 2, 2013
Antonio Car…, Agent, San Leandro, CA
Tue Aug 31, 2010
The "All Depends" clause applies here, if after you have completed your loan modification in your home, and somehow you have enough money to put down on another property, then, I suppose is all right. However, your qualifications for the new loan on another property might not be that easy. They will question the reason for the loan modification, and that will determine weather you can get another loan... or not. Good luck.
0 votes
Scott Godzyk, Agent, Manchester, NH
Tue Aug 31, 2010
If there is a claus ein your mortgage or your loan modification that your house has to be owner occupied, anything else you buy would have to be an investment or second home. They key is how is yoru credit. If it is good and meets teh current guidelines and you have a down payment and closing costs, you just may be able to get another loan.

My advice is to check with a local and trusted mortgage broker, they can prequailify you at no cost, they will look at your credit plus your financials and let you know if there are any programs that you may quailify for.

good luck with your search, please see my blog for more tips on getting a mortgage
0 votes
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