Purchasing a New Home in Florida before Selling
Your Old Home Anywhere
If you are in need of Mortgage Financing for Real Estate in Florida, and  your in the process of considering a purchase of a New Home before you sell your old home anywhere ,  
you have come to the right place.

Preston Ware - 20 Years Experience

Home Loans Florida

NMLS License # 216170

 My Direct Line (561) 329-0075

 

Purchasing a New Home in Florida before Selling Your Old Home  

It's ideal for the #1 reason of having much less stress and a longer time frame to get the entire mortgage and moving process completed. http://www.prestonware.com/buyingbeforeselling

The Alternative: Selling before Buying 

http://www.prestonware.com/sellingandbuying involves closing on your sale, packing up all of your life's possessions in a moving van, and waiting to close on your new purchase maybe the same day (Maybe the next day, maybe within a week time frame.)  

After living out of a hotel room for a while you will appreciate good timing getting your mortgage to the closing table.

The buying before selling scenario allows you to purchase the new house, (and carry two housing payments for a while) and slowly move your life possessions over from one house to another. The only down side of Buying before Selling is qualifying carrying multiple mortgage payments. As long as the total debt ratio is less than 50% you will be O.K Definitely a stronger borrower can Buy before Selling compared to the Selling before Buying borrower who has to go through the stress because of no other choices.



Here are some things to think about when
Purchasing before Selling

Watch the Debt Ratios – With Buying before Selling you will be carrying two housing payments in your debt ratios. Really not so bad because it will be for only a month or two if our markets continue to act as they are now. Back in 2008 many customers got stuck owning two homes and eventually they let one of them go. 


Offsetting a payment with a lease - This is very important for qualifying purposes on the new home. If you do not have sufficient equity in the home you are leaving, we cannot use a lease to offset the payment. Here are the actual guidelines. 

"In order for 75% of the lease amount to be considered in the rental income/loss analysis, an appraisal of the current residence confirming 30% equity is required along with a signed lease and evidence receipt of a security deposit. In addition, the borrower must also have a minimum of 2 months PITIA in reserves for both properties.

If there is less than 30% equity in the current residence, then the entire mortgage payment including any HOA fees must be included in liabilities and the borrower must also have a minimum of 6 months PITIA in reserves for both properties."

Other Guidelines if You wish to keep on studying . . .

How do I qualify a FHA/VA or USDA buyer whose current residence is a pending sale that will not be closed before their new primary purchase?

For FHA and VA loans, there are not any options available to exclude the current residence mortgage payment from DTI in this scenario. USDA will not permit a new primary transaction at all until the current residence is closed.

How do I qualify a Conventional buyer whose current residence is a pending sale that will not be closed before their new primary purchase?

In order to exclude the current residence mortgage payment from DTI for a new Conventional primary loan, the following documentation options are allowed. (If all the components within each option cannot be met, then the current residence mortgage payment must be included in DTI.)

  1. Provide a signed contract for the current residence with evidence that all financing contingencies have been cleared, an appraisal of the current residence confirming a minimum of 30% equity and evidence that the borrower has liquid reserves of 2 months PITIA for both mortgages. OR
  2. Provide a signed contract for the current residence with evidence that all financing contingencies have been cleared and evidence that the borrower has liquid reserves of 6 months PITIA for both mortgages.

The other main consideration here is Equity. Unless you are well off, you will most likely want the equity from your sale to be the money down on your purchase. For example your current home is worth $300,000 and you owe $200,000. You will want to make a good portion of that equity transferred to the new home.

There is really nothing like a bridge loan anymore. In some cases we can work in a home equity line of credit on the purchase but still you will need some out of pocket money because most equity lines only go up to 70% loan to value these days. Ask me about this.