Can I close two properties within 30 days (Conventional Loans)

Question

Hi,

I am buying a primary residence in CA, which will hopefully close by May 5,2013 via conventional loan.  I have another property (investment property) in Maryland under contract, however the settlement date for this is May 20, 2013 (I have already moved out the settlement date once - earlier it was April 20, 2012).  The Primary residence is most important to me but I would like to somehow finance both.   I wanted to reach out to the forum and ask for ideas.
Btw - the seller is willing to do a seller-carryback but I am hesitant (I have never done it and based on the way the lenders are acting these days, I am not sure if I would be able to refinance the property in the future).

Regards,

Sunil

Dion DePaoli · Answer

Is it possible?  YES.

Provided you disclose to the underwriters the other loan in both cases.

You may be able to get away with not having the hit for debt service on the investment property as a the time of funding for the first closing it is not a debt you actually owe yet.  However, prior to funding on the second loan, they will re-pull your credit and look for new trade lines which might show the new first closing loan.

Provided you qualify for each loan on your own merit and can support the debt service in both cases, there really is not a reason to avoid disclosing.  That is, investment property debt service qualification is a little hard than primary residence.  They will reduce the income, if any to account for expenses and vacancy from the property and you will have to have qualifying debt to income ratios.

Sunil Sehra · Answer

Thank you all for the information.  I will call my investment property lender (Credit Union) today and see if/how we can make this happen.

Thank you again.

Sunil

Dion DePaoli · Answer

Sunil Sehra, we can't know what your loan file looks like for either transaction, that said, I am hoping who ever is working on the investment property loan is a quality loan officer.  That is the harder loan.

I think it is important that you amend your attitude toward this entire situation, it is not a dilemma.  Closing on two different loans in a similar time is not uncommon at all.  The process will be smooth or bumpy depending on the skill of your loan officers.

The BOA guys sounds like a classic Primary Residence LO.  Don't mess with "my loan", wait until we close on the Primary Residence and then close on your investment property.  While the Primary Residence loan is important due to the nature of the housing for you from a loan perspective it is the easier loan to originate opposed to the investment property loan.

The BOA loan should really be sort of on auto-pilot and I would be discussing more often with the investment property loan officer.  The investment property loan officer is who I would let direct the investment property loan timing and situation not the loan officer on the Primary Residence at BOA.  It is really as simple as factoring in your PITI obligations on the soon to be primary residence.

I am erroring on the side of you qualifying for both loans in my assumptions here.  The big white elephant to that is did you explain the primary residence transaction and loan to the investment property loan officer so it was included on your loan application?  If so, you would have likely had to turn something to support the loan into underwriting like a copy of the conditional commitment or similar.   If you had to do this, then they are attempting to take your full spectrum of debt service obligations into consideration properly.  If you have not had to deliver any documents or information about the primary residence loan to the investment property loan, then I suppose my assumption that you qualify for both loans could be flawed.

Even the best loan officer can only be as good as the borrower's interview and application.  If you omit details they will surface and bite you sooner or later.  People do purchase investment properties before they purchase primary residences so you would have had to disclose both deals to both loan officers, if they are not one in the same loan officers.

We don't know the terms of the investment property purchase.  I come from a school of thought that closing dates are made to close on or before not randomly extend.  Extending could cost you the transaction if the investment property Seller does not agree to extend the closing date.  You could risk your earnest money deposit.  I hope you understand this.  If you qualify for both loans, they will not interfere with each other in any manner.  I would suggest speaking to the investment property loan officer and if he and his team believe all is good, then follow his lead.  Stalling the investment property loan does not change the outcome.  Sooner or later, the debt service for the primary loan will have to be considered in your qualifications for the investment property loan.  If you qualify for both, you qualify for both, if you do not, well then, you do not.  Although from your vantage point it may seem more complicated than that, it really is not.

I feel like I have kicked this horse several times and the same message is repeated in my post.  So with that, good luck!

Arjun K. · Answer

My lender (Matt Popko at Guaranteed Rate) closed 2 properties for me simultaneously in ~25 days. I asked up him front whether he could do it, what hurdles were, and whether he could rush them for me.  i followed up with him every 1 or 2 days, and got lenders whatever documentation they needed the same day.  I scheduled inspection/etc. immeditely quickly and pre-scheduled appraisal to be for first day after option period ended. The appraiser deayed his report (they outsource), but there was enough time to still close.

Make sure lender understands everything and prioritizes your loan.  and follow-up daily.

Sunil Sehra · Answer

Thanks Dion and Tim.

I started the process for my Primary Residence on April 1.  I am thinking, worst case, my primary will close in 45 days (May 15).  The settlement date for my investment property is May 20.  The lender on my primary residence is Bank of America.  I did disclose my dilemma to them and the Loan Officer said that I would wait to close entirely on the first property (Don't want to risk anything).  That would mean that I probably would'nt be able to close the second property on time.

Another option is that I have a second lender who could do the loan in 30 days on the second property.  The second lender has full disclosure that I am waiting on closing the first property.  Is it possible to start the process for the second property (or at least do some %age of it) before the first loan closes?

Thanks in advance.

Sunil

Tim G. · Answer

I'm doing it in about 45 days. It's been a marathon.

Best of luck to you! It can be done!

Can I close two properties within 30 days (Conventional Loans)

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