Over the last few years as a San Diego Mortgage Broker, I have seen one huge hurdle continue to surface for homeowners who are looking to move up and buy bigger homes. The issue is they have a current home or condo that they can’t sell because it is underwater or they don’t want to sell because they have so much money invested in it.
This is making it difficult for them to qualify for a new San Diego purchase loan. Why is that? Before the mortgage meltdown of 2008 potential buyers who were turning a departing residence into a rental property and buying a new house would simply show a rental agreement and a deposit and be able to use 75% of the rental income to offset the mortgage and other expenses.
This has not been the case for the last several years. Fannie Mae and Freddie Mac instituted a new guideline on conventional loans that states in order to use the rental income on a departing residence as qualifying income that property must have 30% equity. FHA requires 25% equity. If you do not have the required equity, you cannot use the rental income and must qualify with the mortgage payment, taxes, and insurance on the departing residence as well as the mortgage payment, taxes, and insurance on the new residence.
This makes it very difficult for many potential buyers. In most cases people are not able to qualify with 2 mortgages and in other cases they could qualify to purchase a come, but it limits them on the maximum purchase price the can qualify for.
I am happy to announce that as San Diego Mortgage Brokers, we now have a solution for this. We have a lender who will now allow us to use 75% of the rental income based off of a rental survey that is done at the time of the new purchase loan. This program does not require 30% equity. In fact they require no equity. The house can actually be upside down. The only condition is that the borrower has not taken cash out of the property in the last 2 years. This program will allow loan amounts up to $750,000 to an 80% Loan to Value (LTV) or $3,000,000 up to a 75% LTV.
If you would like to get a free rate quote on this program, please click HERE.
I believe this program is going to help many potential buyers be able to qualify for their San Diego purchase, when before they could not. If you would like more information on this program please feel free to call or email me. Due to the fact that I am a San Diego Mortgage Broker as well as Banker, I have a vast number of programs and lenders available no matter what your situation.