I am not sure if this makes a difference, and I am considering all of my options.. Therefore ---
If I want to buy a new home, but not immediately sell the old home (I hope to refinance and maybe rent it out till it sells or ,market improves, does it matter if I apply for a new home loan first, or a refinanced loan first? Or would it even matter?
I really don't want to keep the "old" home, but not sure what to do due to the market.... Any suggestions??? Thanks!!
Thanks for visiting FatWallet.com. Join for free to remove this ad.
posted: Dec. 26, 2012 @ 4:23p
Whats the mortgage interest rate on the 'old' home? If you want to sell it then why not try and sell it? If you fail to sell it then maybe rent it but I don't see why you wouldn't try to sell it first.
If you want to sell soon then refinancing may not make sense as you'd be spending closing costs and that would possibly cost more than any interest savings in short term.
If you want to buy a new house while owning the existing house the bank will require you to qualify for enough debt to carry both loans at once. You may/ may not be able to do so. Depends on the loans and your income and other debt.
If you refinance after you sell and rent it then you'd have to qualify for a income property loan which is higher interest rate and higher LTV requirements.
Be vewy vewy quiet
posted: Dec. 26, 2012 @ 4:27p
If you are going to rent, then refinance now This has two benefits 1) you will have a lower payment, which will enable you to more easily qualify for your new mortgage 2) you will qualify for lower rates as you live there rather than the higher property owner/ rental rates
Senior Member - 8K
posted: Dec. 26, 2012 @ 4:45p
Won't the Refi ding his credit score for the 2nd home?
posted: Dec. 26, 2012 @ 6:43p
forbin4040 said: Won't the Refi ding his credit score for the 2nd home?
posted: Dec. 26, 2012 @ 7:07p
forclosedhome said: forbin4040 said: Won't the Refi ding his credit score for the 2nd home?
Probably shouldnt' be a huge ding. I bought a house and qualified for a mortgage and then did a refi within a month afterwards and my credit scores didn't change by more than 10 or so points.
edit: Also.. if you do both applications within a short enough time period then it won't ding you. You're allowed to shop for rates and not have each application hit you.
Senior Member - 2K
posted: Dec. 26, 2012 @ 8:02p
Do the refi first. The "ding" will be at max 5 points and will not affect you at all. The plus is you will get a lower DTI ratio and it will look less like a buy and bail to the bank.
Senior Member - 2K
posted: Dec. 27, 2012 @ 2:13a
If you just get a no points no closing cost loan, it's a no brainer to do the refi. That's assuming the rate is still lower than your current rate. If you're sure you're going to sell the property in the next 5 years, just go for a 5 year arm with even lower rates. If you're hoping to make a profit, you probably want to sell in the next 3 years anyway because you won't have to pay capital gains taxes on a property you've lived in in the last 2 out of 5 years.
Disclaimer: By providing links to other sites, FatWallet.com does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to FatWallet.com.
Members of our community may attach files to a post in accordance with the User Agreement. FatWallet is not responsible for the content, accuracy, completeness or validity of any information contained in any attached file. Files have *not* been scanned for viruses. Be especially wary of Excel files which may contain malicious content.
Earn Cash Back while you shop - just 3 simple steps.
1. Sign Up so we know who to pay! (It's FREE.)
2. Shop through FatWallet for deals from your favorite stores. Your online purchases earn Cash Back that builds in your FatWallet account.
3. Get Paid by requesting a payment via check or PayPal.
FatWallet coupons help you save more when shopping online. Use our Coupons Search to browse coupons and offers from thousands of stores, gathered into one convenient location.
As part of our FatWallet Community, you can share deals with almost a million shoppers in our forums. Forum content is generated by consumers for consumers. Share deals, money-saving tips, and more. It's FREE, fun, and addicting.
Our customer experience team is here around the clock - real people ready to assist.