All Forum Posts by: Justin Mespelt

I'm looking at selling my personal residence and buying a new home. Most of my down payment is the current equity I have in my current home. My big question is how willing are banks to acknowledge that you are selling your home when approving you for your next mortgage? Without selling my current home my debt to I come ratio is not going to allow a new mortgage. My wife is self employed so that messes up our provable income also. 

I live in a hot market so I believe my current home can be sold quickly. Would you suggest just selling it first? Finding a temporary rental sounds like a pain in the *** considering we have a 3 year old. 

HELOC? Bridge loan? Seller contingencies in a really hot market? Renting back a home after you sell it? All ideas, none great.

Thanks

Welcome. Great to have more local guys interested in the market. 

It's the sellers agreeing to the contingency that I would worry about.  I guess I'm just apprehensive about what could go wrong or what we could miss out on by trying to juggle both transactions in a way that allows us to buy a home we like.

I guess I'm not making sense. If I did a cash out refi, the mortgage on my current home would be locked in for something around 240k. There is no way it would be a cash flowing rental at that PITI. However, if I did a simple refi the locked in PITI would get close to rentable. But the real issue is the access to the equity for use in the next property. I'm looking for the best way to use current equity on a future residence. I guess this is more of a purchasing logistics problem. With a long timeline in mind for my next purchase (2-5 years) do I trust that if I find a house I like I can get them to accept an offer contingent on me selling my current property? Or if I have access to my equity through a HELOC can I use that as a down payment and simply carry two mortgages in case the old home doesn't sale quickly?

How often is a contingency on sale of previous home clause used in home purchase? Would having access to a HELOC help me in finding a below market deal, like a HUD home, other forclosure, a home bought off MLS if I can find a wholesaler/flipper that would want to work with me and possible partner with my financing? I've only ever purchased the home I live in, so the proper methods of moving on to a new home correctly are new to me.

For clarification, the equity in my current home would be the down payment on the next home. In a hot market wouldn't it be better to be able to put cash down and establish the new mortgage just in case the previous home doesn't sale quickly? An offer that includes a contingency seems to be less preferable to the seller. 

And also to clarify, there would be no cash out refi in either scenario. The refi would be to simply remove $90/month PMI and establish a slightly lower interest rate.

Ok, I need opinions and advice. Here's the situation: I bought my first home June 2013. Got a great deal, put a lot of cleanup and work into it, and thanks to a hot Portland market I would conservatively estimate the home to be $240k (could be as high as 260k, we are getting like 2% appreciation per month in some areas here). I owe $144k, so conservative equity over $90k. PMI at $90/month until 2022.

In the next 2-5 years my wife and I would like to move to a different area where we would like our kid to go to school. What is my best strategy, what would you do? My current thought process is to get an appraisal and setup a HELOC for down payment use. However, I could refinance at the same time, get a slightly lower interest rate (currently 3.875) and drop PMI. But if I happen to find our next home soon, refinance fees would be wasted. I could also keep my current home as a rental, but the numbers wouldn't work well (could rent for 1500-1700 I think). Online calc estimates make me think after refinance my monthly PITI would drop from 1150 to a bit over 1000 with the PMI removal and interest rate reduction.

And for those with key word alerts setup, any recommendations for refinance / HELOC providers in Portland Oregon? And any wholesale guys that might pick up homes is Sandy from time to time, get in touch please :)

I received a "quote" through Zillow for a refinance from a company called eLEND. Does anybody have experience with them?  Their fees and rates seem to be the best I can find. 

I'm in Portland Oregon if anybody has recommendations for a local refinance source. 

Welcome.  I'm a newbie here too, looking to learn all I can.  Don't hesitate to ask questions, this is the best resource a person could have.

Thank you for the advice. I really have no want to "screw it to my current lender". I was just trying to get this PMI removed the most efficient way possible. I have this mortgage at 3.825%, so I don't know if it would be worth it to refi and possibly end up with a higher interest rate AND have closing cost.

I responded to the provider asking the questions above.  I will check back in if/when I hear anything from the.

Thank You.

I'm looking for a little advice.  My wife and I bought our current home (only home purchase we have done) in 2013.  Original loan amount of $152,950, current principal balance $143,617.  However, in those 3 years the local marked has appreciated significantly.  For whatever it is worth, the Zillow "estimate" is over $250,000.  Even with a huge grain of salt, I would say our property has increased in value to over $200,000.  

With those facts, I messaged my mortgage provider and asked about removing the $90/month PMI. Their response was:

*********

Thank you for contacting Mortgage Services regarding your
mortgage account.

In order to remove your PMI requirement, your loan must reach
a loan to value ratio of 80%. Your current loan to value ratio is
89.20%. You may pay down your principal balance to reach the
80% at any time.
You may also order a new appraisal if your value has increased.
In order to have a new appraisal done on your property, you
must have made improvement on the property since your loan
was originated. You will need to send us the list of
improvements along with a check of 540.00 to request a new
appraisal to be completed. The new loan to value ratio must be
below 75%.

We hope this information is helpful. If you have any follow up
questions related to this concern, please let us know.
Sincerely,
Mortgage Services Department

*******

Is this industry standard?  It sounds to me like they would only take into account the forced appreciation from improvements we have done (new roof, remodeled bathroom), and would not take into account market appreciation.  For example, our home is 1400 sq foot 3/2, and a 750 sq ft 2/1 across the street just sold for over $200,000.  I feel our home is safely above the $193,000 value needed to reach 75% loan to value ratio.  However, it would be really frustrating to pay $540 just to have them tell me my home is now worth $165,000.  

Thanks for the advice.

Justin