Acquisition Of A New Property – New Mortgage Guideline

Mortgage guidelines continue to change, add this to the New Mortgage Guidelines 2009 list.
Lenders who sell their paper to Fannie Mae and Freddie Mac (the majority of Lenders) have implemented a new guideline for individuals who are prospective Mover Uppers and Investors.

The three facets prospective buyers face:

Mover Upper (Selling the primary residence)
If you plan to close on your new home prior to the closing of your existing home — even if it’s only by a day — both payments must be accounted for as monthly debt obligations on your mortgage application. This will increase your debt to income (DTI), essentially you have to qualify with two mortgage payments.

Converting your residence to a second home
If your current home has less than 30 percent equity in it, your mortgage application for the new home will not be approved unless you can show 6 months worth Reserves (mortgage payments + taxes + insurance) for the current home and new home combined.

Becoming an Investor – Converting your residence to an investment property
If your current home has less than 30 percent equity in it, any rental income derived from a tenant is disallowed on your mortgage application for the new home.  You must still count the mortgage payment + taxes + insurance as a monthly debt.

I don’t make the rules I just relay them.
For more Mortgage Info and Current Mortgage Rates check out

I have already had multiple clients bark at this, and some not believe me.  This is the New world of lending.
Yes there is credit out there, and yes banks and lenders are financing homeowners. You just have to fit the niche.
We as a society cannot place full blame the lenders for the new ever tightened guidelines, consumers carry a portion of the responsibility as well.  It was housing that placed us in this mess, and in order to avoid a part duce we have to walk the new found line.

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