Keeping Your Current Home While Buying Another:
New Guidelines Apply
In recent weeks, there has been some very good news in home financing for homeowners that choose to retain their primary home (or can't sell because they're underwater) while pursuing the purchase and financing of a new home ...
Underwriting Guidelines that play a predominant role in the financing of these types of purchases have now been relaxed. New Guidelines now allow a more manageable level of funds (less than before) be required to buy and close on these new homes.
The housing decline that took place between 2008 to recent times resulted in a tightning of lending standards. However, Market Values have now recovered and rebounded in many, if not most, of the country.
Recognizing this, plus the fact that there is now more stability in the economy, Fannie Mae and Freddie Mac have lowered the "Reserve" Requirements made upon Buyers choosing to retain/rent their current residence, but buying and moving to a new home.
Lending Guidelines define Reserves as: Funds held back (in Reserve) in a savings, retirement, or investment account AFTER considering all the funds needed for Down Payment and Closing Costs.
One month Reserve is equal to: The TOTAL MONTHLY Housing Expense of any/all Real Estate owned.
That Total Monthly Housing Expense referred to includes:
- Principal & Interest Payments
- 1/12th of the Annual Real Estate Taxes & Homeowners Insurance
- Monthly Mortgage Insurance
- Homeowners Association Dues (as expressed in monthly amounts)
FORMER Guidelines typically required: 6 Months Reserves for each and every property. That amount made qualifying more difficult for some Buyers.
Plus, Buyers still needed to come up with the necessary Down Payment needed for their new home purchase.
NEW Guidelines have been revised downward: New requirements now require only2 months Reserve (as a Rule).
In some cases: The 2 months Reserve is not required at all. Those cases are dependent on:
- Loan-to-Value Ratio
- Credit Scores
- Debt-to-Income Ratio
If you're looking to move or buy another home ... and are presently "Underwater" or lacking a back-up savings fund ...
You may be the perfect candidate to buy under these new Guidelines!
Contact me for more information regarding these new Guidelines, your eligibility for financing, and the options that exist for your home buying today.
* Hoping to buy a home in the greater Chicagoland area? Contact me today. I'll put my 37 years of mortgage experience and expertise hard to work on your behalf.
I can be easily found at:
Mortgage Lender - NMLS #216987 - IL Lic. #0006220 - WI Licensed
American Portfolio Mortgage Corp.
Mortgage Originator - NMLS #216987
IL Lic. #031.0006220 - WI License #216987
Gene Mundt, Mortgage Originator, 40+ years of #mortgage experience, will offer you exemplary mortgage service and advice when seeking: #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including: The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL and Wisconsin.
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