Question by iamjoesmamma: Should I try applying for a home loan now, or wait?
My husband and I are in need of a bigger house. The sooner we can get it, the better. We refinanced our mortgage on our current home almost 2 years ago, but that was before our 4th child was born. The house is in both of our names, but originally it was just in my husband‘s name until we refinanced. Our credit was bad, but has improved. 5 months ago, mine was 620, and my husbands was just below 600. We haven’t had any late payments since the refinance and my husband and I both have a decent income. We live in central IL and the cost for a house that would be big enough for us would be between ,000 and 0,000, depending on the condition of the house. Together, my husband and I make about ,000 a year. Our current home will be worth about ,000 to ,000 when we are finished remodeling. Could I apply for a home loan within the next few months or would it be wise to wait another year to 18 months before applying?
I forgot to add that the income amount that I listed is what we bring home after taxes and such are taken out.
We would have to sell the house we are in. we only owe about ,000 on it. We don’t want to put in on the market until we know that we would be able to buy another house. We are in a great location but we have outgrown our house. We are right across the street from the elementary school in our town.
Best answer:
Answer by Andrea
I think you can wait a bit.
What do you think? Answer below!
Here is problem. What are you going to do with the old house. Rent it, sell it, or walk away.
In order to qualify for a loan, you can rent the old one out and they will count the income. HOWEVER, in order for this income to be counted, you will need to show that you have at least 30%equity in the old house. So if it’s worth 85,000, then you can only owe 59,000 to the bank(s). If you have this much equity, just sell it. If you have less then this much equity, you will need to be able to afford BOTH mortgages.