January 23rd, 2015
- We are interested in purchasing a home. Our current home is for sale and is under contract. Closing is scheduled on our new home before the closing of our existing home. How does this affect buying the new house? You would need to qualify with both payments. The lender must also document required minimum reserves of six months PITI for both properties. Fannie Mae allows a reduction to two months reserves if 30% equity in the existing principal residence is documented in accordance with the Equity in the Current Principal Residence requirements as follows: Fannie Mae will not require the current principal residence's PITI to be used in qualifying the borrower as long as the six months of reserves (or two months with documented equity) for both properties are documented and the following additional documentation is provided:
- the executed sales contract for the current residence, and
- confirmation that any financing contingencies have been cleared.
- We would like to refinance an investment property. The property is titled in an LLC. It is my understanding this may be an issue. Yes, this is an issue. The property whether prior to application or at closing would need to be in individual name, for conventional mortgage purposes. We also have to prove "continuity of obligation". This means to provide proof that the LLC managing partners are the borrowers in refinancing the property. you.
- What is delayed financing and what are the requirements? Also known as cash-out refinance transactions. Delayed financing must pay off the existing first mortgage. If a property has been listed for sale in the last six months, the cash-out amount is limited.
Please feel free to contact me with any questions you might have. I look forward to working with you and your clients. Please remember, I am licensed in Virginia, North Carolina and Florida.
Jennifer Keenan, Sr Mortgage Consultant, NMLS# 101837
Tidewater Home Funding, 757-272-4199