Buying a Primary Residence Without Selling Your Current Home?

Rules for Buying a Primary Residence

Without Selling Current Home! 

Rule:  Home on the market and purchasing new primary residence

Q: What if the current home is NOT sold before purchasing primary residence?

• Must qualify with both monthly payments

• 6 months worth of monthly payments for BOTH homes as a “cushion”
• Can be reduced 2 months worth of monthly payments if current home is 70% LTV or below

Q: What if current home is sold—but NOT closed before purchasing primary residence?

• Must present non-contingent sales contract for sold home
• Must present a lender’s valid loan approval for the new buyer
• Does not have to qualify for both payments

• 6 months worth of monthly payments for BOTH homes as a “cushion”
• Can be reduced 2 months worth of monthly payments if current home is 70% LTV or below
• If sold to relocation company, copy of executed buyout agreement, client does not need mortgage payment cushion or count current payment in qualifying ratios

Rule:  Converting Primary Home into Second Home and purchasing new primary residence

Q: What if client wants to convert their current home into a second home and purchase another primary residence?

• 6 months worth of monthly payments for BOTH homes as a “cushion”
• Can be reduced 2 months worth of monthly payments if current home is 70% LTV or below
• Qualify for both monthly payments

Rule:  Converting Primary Home into an Investment Property

Q:  Can you qualify using rental payments?

§  70% LTV or less on home being converted to rental home

§  Fully executed lease agreement and Proof of receipt and deposit (into bank) of security deposit

§  2 months worth of payments for BOTH homes as a “cushion”

Q: What if the LTV is more than 70%?

• Must qualify with both monthly payments
• 6 months worth of monthly payments for BOTH homes as a “cushion”

Q: How is the LTV determined?

• Exterior-only appraisal dated no more than 60 days from the date of closing.

Only certain borrowers will qualify now to purchase a new primary residence.

Jayne Combs

Land Home Financial Services

Loan Officer

NMLS#222444 and DRE#01231515

jcombs@lhfinancial.com