What is the name of your state (only U.S. law)? North Carolina
Hello everyone,
I bought a townhouse 5 years ago with an FHA loan. I bought it as a foreclosure and managed to get $14,900 towards the down payment with a financial assistance program North Carolina had at the time. I lucked out and now my mortgage is down to approx $45k and my payments are about $400/month.
I have since gotten married and had a baby. The townhouse is a 2 bedroom, 1.5 bath home. We are trying for our second child (you'll see how this ties in momentarily, haha). Because of this, we are wanting to upgrade the size of our home to a 3 bedroom, 2.5 bath house. Yesterday, we found a single family home literally on the same street as ours that will be going on the market for approximately $107k. We spoke with the neighbors and found some information - such as, it's going to need a lot of repairs and renovations to get it up-to-date.
I started doing some research and found the 203(k) FHA loan. Seems like exactly what we need! One problem though - you can't have two FHA loans at one time. There are exceptions to this rule and one of the exceptions are "increase in family size". Technically, my family size has increased by 2 people since I originally purchased my home, but also technically, there is enough space for all of us (for now). For this exception, you must also pay down the outstanding FHA mortgage on the present property to a 75% or lower LTV ratio. My house last appraised at $76,000 and I've done MAJOR renovations to it to increase the value. But, even so, at that appraisal value, my LTV ratio is around 60% so I'm good there.
We have good credit scores. We have about $11k saved for a downpayment/closing costs.
So... here are my questions, in no particular order.
1. If I get pregnant, does that make our household 4 people? I understand that's getting into technicalities, but technicalities make all the difference buying a home. My ASSUMPTION would be "no". I would think we have to have legal dependents and an unborn child, according to tax law, doesn't count as a dependent. Can anyone confirm that? I can't find documentation on the HUD website no matter how hard I look...
2. If I refinance my current loan into a non-FHA loan (conventional), is there a possibility I'll be stuck in my house for a certain period of time before I can move out? I understand that if I refinance my current loan into a non-FHA loan, then I'll be eligible for a FHA loan... But will this get me stuck? Does it depend on the lender?
3. Does a home equity loan ruin my chances of getting another mortgage? Honestly, this question is for the lender, I'm sure... but, I can get a pretty sizeable home equity loan on my current property. I would LOVE to be able to take a chunk out, stick it in my savings, purchase the new home, and then use that money for renovations/repairs on the new home. That seems too good to be true.
4. Any other suggestions/ways you have would be EXCELLENT.
5. I found that the limit of seller concessions is usually 6% of 90% of the loan value. Let's say we take out $107k for the home loan, the 6% would be about $5,778. Is that the right way to calculate that? If so, if our loan value is that low, it looks like the seller concessions may cover almost 100% of the closing costs.
Okay, I think that's it. One last thing I wanted to mention is that I've been at my job for 8 years so job stability is good. I know that if I do get pregnant, some will say we shouldn't be house-hunting, but my job pays for maternity leave and I'm 100% positive I can get a note from my employer stating so.
Thanks everyone for your help!!
- Dani
Hello everyone,
I bought a townhouse 5 years ago with an FHA loan. I bought it as a foreclosure and managed to get $14,900 towards the down payment with a financial assistance program North Carolina had at the time. I lucked out and now my mortgage is down to approx $45k and my payments are about $400/month.
I have since gotten married and had a baby. The townhouse is a 2 bedroom, 1.5 bath home. We are trying for our second child (you'll see how this ties in momentarily, haha). Because of this, we are wanting to upgrade the size of our home to a 3 bedroom, 2.5 bath house. Yesterday, we found a single family home literally on the same street as ours that will be going on the market for approximately $107k. We spoke with the neighbors and found some information - such as, it's going to need a lot of repairs and renovations to get it up-to-date.
I started doing some research and found the 203(k) FHA loan. Seems like exactly what we need! One problem though - you can't have two FHA loans at one time. There are exceptions to this rule and one of the exceptions are "increase in family size". Technically, my family size has increased by 2 people since I originally purchased my home, but also technically, there is enough space for all of us (for now). For this exception, you must also pay down the outstanding FHA mortgage on the present property to a 75% or lower LTV ratio. My house last appraised at $76,000 and I've done MAJOR renovations to it to increase the value. But, even so, at that appraisal value, my LTV ratio is around 60% so I'm good there.
We have good credit scores. We have about $11k saved for a downpayment/closing costs.
So... here are my questions, in no particular order.
1. If I get pregnant, does that make our household 4 people? I understand that's getting into technicalities, but technicalities make all the difference buying a home. My ASSUMPTION would be "no". I would think we have to have legal dependents and an unborn child, according to tax law, doesn't count as a dependent. Can anyone confirm that? I can't find documentation on the HUD website no matter how hard I look...
2. If I refinance my current loan into a non-FHA loan (conventional), is there a possibility I'll be stuck in my house for a certain period of time before I can move out? I understand that if I refinance my current loan into a non-FHA loan, then I'll be eligible for a FHA loan... But will this get me stuck? Does it depend on the lender?
3. Does a home equity loan ruin my chances of getting another mortgage? Honestly, this question is for the lender, I'm sure... but, I can get a pretty sizeable home equity loan on my current property. I would LOVE to be able to take a chunk out, stick it in my savings, purchase the new home, and then use that money for renovations/repairs on the new home. That seems too good to be true.
4. Any other suggestions/ways you have would be EXCELLENT.
5. I found that the limit of seller concessions is usually 6% of 90% of the loan value. Let's say we take out $107k for the home loan, the 6% would be about $5,778. Is that the right way to calculate that? If so, if our loan value is that low, it looks like the seller concessions may cover almost 100% of the closing costs.
Okay, I think that's it. One last thing I wanted to mention is that I've been at my job for 8 years so job stability is good. I know that if I do get pregnant, some will say we shouldn't be house-hunting, but my job pays for maternity leave and I'm 100% positive I can get a note from my employer stating so.
Thanks everyone for your help!!
- Dani
