Hi, I have a simple request with a very tight time restriction. Here’s the situation. We own our home, value of $1.1-1.2mil and outstanding loan of $655k. We want to bid on a new home today (like in a few hours from now) for $1.55mil with a 30-day close which is 30-60 days before we will sell and close on our current home (it should go quickly as most good properties do in No. Cal but won’t be on the market for about 3 weeks). My current lender is not willing to give a loan on the new property until my current loan has been paid off due to the huge debt burden that would result in (roughly $2.0mil combined until first home is sold). While it is true that debt is too high for us in the long run, we are comfortable with dual payments for the short term, especially if we finance our new property with an Option ARM or Interest Only to minimize payments while we have both properties. Other pertinent info: we have FICO scores of 790 and 800, ~$150k in savings/stock that we can put into the 2nd home purchase. Documented combined income in excess of $200k/year. Any suggestions or help that will allow us to confidently submit an offer with a 30-day close (e.g. a preapproval letter in hand)?
When you use an option ARM to purchase a home, the paymant calculation used is your index + margin. This is known as your qualifying rate. The underwriter can not approve you based on the minimum payment amount. What LTV are you looking for on the second home? With those scores you could go noc and have ZERO problems getting a loan. I just sent you a private message.
Just by reading your post you are in excellent position to close this deal within a 30 day close. I specialize in the cashflow ARM you referred to, which will easily allow you to get into that deal in NorCal. I understand your lender is unable to get that done, however this loan can be documented in several ways regardless if your current primary is sold or not. Shoot me an email or call my office, more than happy to discuss these options. You definitely wont have to touch the funds in your savings or refinance your existing 1st mortgage to get cash out. Leave both those options alone.
How are you?
Basically YOU have OPTIONS. Don’t understand why your current lender cannot get this done for you. I don’t see any problem putting some scenarios together for you. I can put a pre qual in your hand within 20 minutes from speaking. Talk to you soon.
Well…
I just ran your scenario through my software and I came back with 11 lenders that will do this loan for you no problem. So you can contact me at your earliest convienence. Thanks.
Aside from closing this deal, I’m also interested in reviewing your future goals after this deal closed. Option loans are great, but there is more angle to the program than just the start rate payment. Be sure your setting up the right deal. All emails or calls welcome. Good Luck.
Thanks to all who responded. As an update, we did not win the bid (things are very competitive still in No Cal for good properties!) but will continue looking as we get our own home ready to sell in the next month. Obviously from the response, there are several options and I’m thankful that people were so quick to lend advice and options for us so that we could at least have a chance at the house. I will keep the people of this forum in mind when we do come around to finding and purchasing a new home in the coming weeks or months.