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Financing in West Melbourne : Real Estate Advice

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  • Home Buying3
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Mon Aug 22, 2011
Shane Milne answered:
Assuming you are talking about buying a new home for you to live in...

In order to use the rental income from your primary residence you will be renting out, when using Fannie/Freddie (collectively are called "conforming") financing to purchase your new home you'll need to have 30% equity, if you are using FHA financing then you'll need either 25% equity or be relocating to a new area not within commuting distance (then equity is irrelevant). VA financing (if you are an eligible Veteran) has no such equity or relocation requirement, although some lenders are known to impose FHA's guidelines for their VA loans in that situation. With conforming financing you may need to have up to 6 months of both houses mortgage payments in financial reserves, FHA & VA have no such reserve requirement... if you already have an FHA or VA loan and are planning on using the same type of financing again, further requirements/guidelines will apply.

If your debt ratio is 31% when you factor in your current mortgage payment, your consumer debt (car, student loans, credit cards, etc.), AND the new mortgage payment on the home you'd be buying, without any rental income, that is excellent and shouldn't pose any problems qualifying. Dropping it to 25% by being able to use the rental income wouldn't be needed in my opinion. Ideally you'd want to keep your debt ratio no more than 45% for ease of qualifying. If I misunderstood your numbers, please clarify.

Shane Milne | Loan Officer in Orange County, CA | NMLS #81195
Direct local #'s: 949-273-4161 or 646-257-4842
Lending in all 50 states, all types of mortgages
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Fri May 13, 2011
Peggy Brown answered:
It's my understanding that there are no mortgage companies or banks in Florida that will lend on mobile homes. A consumer loan from a bank may be a possibility - like a car loan. If not, cash is the only option. ... more
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