September 7th, 2010 11:04 AM by Eric Fang
Q: We have Annual income of 180k. And want to purchase a property of 700k with 20% down. We have another underwaterhouse with mortgage payment of $2755. Can I qualify to purchase this property? I have another auto loan ofmonthly payment $700.
A: The answer for this question is yes or/and no.There are a lot of difficulties to get the loans.First, we can not use your rental income since its LTVis over 70%(most lenders allow you to use if you have30% or equity in the house); Second, with the mortgage paymentfor both houses and your high auto payment, your Debt to IncomeRatio is way over 45%(required by Fannie Mae).So, you can not qualify for a primary loan.
But if you can have 25% down payment, you can purchase as a rental. And since we can use the market rental as your incomefor rental purchase, you can at least have this transaction closed.Then a few months after the close, after you move in this property,you can refi back as primary, with rental income from the current house.