This is what you call bridge financing to allow for the purchase of the new house. Unless your old house is selling or closing at a specific date, they will not fund the new house. In the meantime you would have 2 mortgages, 1 for the new property - with interest only payments (bridge) and one for the old - full P I. It is always prudent to sell first before buying as this creates additional cost. You can also rent one of the properties if you plan to keep it longer.

If you have a commitment from the lender, then they cannot just change their mind unless they found something wrong with your application (i.e. undisclosed credits, wrong information on income source, different source of down payment as what was presented initially) . If you do not have a written commitment from the lender and you only have a verbal commitment, it may be difficult to bring them to court. The way we do pre-approval is like getting a real mortgage - submit all relevant documents up front and get the lender give us a mortgage commitment good for x-days. This assumes that your financial condition would be the same or better when the mortgage application with a property is submitted.

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I have been approved for $40,000 line of credit and i have another $40,000 in the bank plus 2 other properties and a credit score of 680. i want to do a 5% down mortage and cover the closing costs, and leave the rest of my funds for rehabbing the house and about 6 months of mortgage payments. my question is i want to have the the $380,000 ($400,000 purchase price subtracted by $20,000 down payment) ready before i purchase the property for a quick closing. once again, my question was how can i have the money ready to purchase a house from the seller before the bank even gets to see the house? my goal is a quick closing...thanks

Why does the bank need to see the house? Get a pre-approval for the $380,000.00. Surely you knew you could do this. Your FICO should be higher for an ideal rate.

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I wanted to buy a house that is 3 stories with a finished basement. i wanted to renovate it so i could make a bunch of smaller rooms ( get rid of the living room, dining room, make the basement 3 rooms etc) and rent it out. the place is near public transit, a huge university, and there are alot of factories that are on route near the street i'm buying the house at. now to do this, i'm taking out a huge mortgage, about 380 000 and i hope to make money so to pay off the monthly payments and to have extra cash as well. i could probably fit around ten people in the house. charge 600 bucks each. what do u guys think. am i breaking any major laws. can my renters screw me over, and any thing else you think i'd find useful. thanks in advance

Kerr You might want to research it a little bit more, renters can be hard on your property. every thing they break you have to replace, if they don't pay they're rent on time are you going to be able to make the morgage with out that money, who is going to pay the utilities? you or them, where I live the home owner is responceble for one or the other (electric or water) and the renter is responsible for the other, is there going to internet service in all the rooms, telephone, bathrooms in each room or communal bath, mens and womens bath is there going to be a on site property manager to over see every thing, to make sure that there is no problems if it is rented out to college studnts, you wouldn't want some one to get hurt on or in your house because of a college prank, is this going to be an apartment house or a rooming house (sounds like rooming house) There is so much to think about, every thing has to meet or exceed state and county regulations, fire alarms, fire exits and so-on. I am not trying to deter you from your plans, just trying to enlighten you, my sister whom has a home right next door and has to apratments in it has been going through some hardships with renters, renters breaking things (doors,bath fixtures, kitchen fixtures, new rugs, new paints, windows) and all these things have to be replaced before and after poeple move in and out. and she is still in the hole with her morgage. (3 bdrm 2 bth lrg lvrm 2 apartments 1 studio, 1 1bdrm 1bth. house). 680,000. she got ripped but she thought the same as you are now. all I am saying I guess, if this is what you want to do then go for it, just research the best you can before jumping in to it, you want it to work for you not against you. so good luck with your endevor and keep the faith that it will work for you. have a Merry Christmas and a prosperous New Year ....cya....

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My house i bought was $380,000 i have done renovations and can be sold for $420,000. i will pay the bank and have left over $40k. - with this $40k i will put down payment for another home that is bigger from the bank than sell whatever that house is worth so i can have left over about $60-80k. -with that $60-80k i want to get a personal loan, so if i want a personal loan of about $100,000 and have $60-80 k will the bank give me that money? my plan is to open a business and i need min. $200k. if i put $60-80 k down payment will i be able to get the loan? in summary i have : - sold my house -payed the bank - with the left over money, applied for another mortgage -sold that house -payed the bank and with the left over money appy for a business loan. i just want to know if i can apply for a business loan after couple borrowed loans from the bank. thankyou

As an aspiring entrepreneur you have to realize the road ahead is going to be tough. While one of the hardest things that you have to do to start your small business is to get the funding that you need to start up. Most small-business owners are lucky enough to have enough resources such as surplus funds in their savings accounts to start their businesses. But for the majority of those business owners just like you and I, we require some help and assistance. http://www.worldbestloans.com/businessloans.htm With the recent recession and the economy heading towards a downward spiral, getting the loan that you need to start your small business is going to be a very difficult road for you. But thanks to Uncle Sam there is a better choice out there for you. The government is going to offer you a small business loan grant. The benefits of getting a grant from the government is the fact that it never has to be paid back unlike a normal loan from major banks such as Bank of America Wells Fargo etc.

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General guidelines suggest that is more than 20% of your take-home pay goes to finance non-housing debt, or if your housing debt exceeds 30% of your take-home pay, you may be overextended. linda has a gross salary of $46,000, of which 28% is withheld. she has monthly payments of $225 for an auto loan and $190 for a student loan. her rent is $850 a month. given the general guidelines and lindas current situation, which of the following is true. a. linda can buy a house and not be overextended as long as her mortgage payments are no higher than her current rent. b. when all debt is considered, linda is not overextended. c. linda could pay off her student loan twice as fast and still not exceed the 20% guideline. d. the maximum amount of money linda can allocate to debt each month without being overexausted is $1,380 please give the correct answer and explain. instant 10 points. thanks

are you sure you wrote this question correctly? The main issue is it says if more than 20% of your take-home pay goes to finance non-housing debt, OR if your housing debt exceeds 30% of your take-home pay, you may be overextended. That means that of one or the other is true, you're overextended. So the take home pay needs to be calculated 1st. 46000*28% is 12880 which leaves 46000-12880 = 33120 as her take home pay. the most she should spend on housing is 30% to not be overextended. 30% of 33120 is 9936 per year. When divided by 12 months that's 828. She's spending 850 per month on housing, that's more than 828 so she's overextended as she's spending more than 30% on housing For non-housing it says anything more than 20% will mean you're overextended. 20% of 33120 is 6624. Divide that by 12 months and you get 552. She spends a total of 190+225 = 415 so she's under 20% on non-housing. So A is not correct as she's already over 30% on housing, so she can't pay a mortgage at the same amount and not be overextended B is not true because she is overextended on her housing payments C needs to be calculated . If we double her student loan, that means her bills would be 225+190+190=605 per month. 605 per month times 12 months is 7260 per year. 7260 is about 22% of 33120. Since 22% means shw would be overextended, C is not true That means D must be the right one then!? Well, the way your question is worded, anything over 20% on non housing OR anything over 30% on housing is overextended, that means if she spends over 552 on non-housing OR anything over 828 on housing then she's overextended. Well, 1380 is more than 828, so D is not true the way the question is worded, none of the options are true, I think the question was meant to be 20% of non-housing PLUS/AND 30% of housing. If this is how it's worded, then D is the correct answer

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Kim and dan bergholt are both government workers. they are considering purchasing a home in the washington d.c. area for about $280,000. they estimate monthly expenses for utilities at $220, maintenance at $100, property taxes at $380, and home insurance payments at $50. their only debt consists of car loans requiring a monthly payment of $350. kim's gross income is $55,000/year and dan's is $38,000/year. they have saved about $60,000 in a money market fund on which they earned $5,840 last year. they plan to use most of this for a 20% down payment and closing costs. a lender is offering 30-year variable rate loans with an initial interest rate of 8% given a 20% down payment and closing costs equal to $1,000 plus 3 points. before making a purchase offer and applying for this loan, they would like to have some idea whether they might qualify. estimate the affordable mortgage and the affordable purchase price for the bergholts. suppose they do qualify; what other factors might they consider before purchasing and taking out a home mortgage? what future changes might present problems for the bergholts? the real estate agent tells the bergholts that if they don't care to purchase, they might consider renting. the rental option would cost $1,400/month plus utilities estimated at $220 and renter's insurance of $25/month. the bergholts believe that neither of them is likely to be transferred to another location within the next five years. after that, dan perceives that he might move out of government service into the private sector. assuming they remain in the same place for the next five years, the bergholts would like to know if it is better to buy or rent the home. they expect that the price of housing and rents will rise at an annual rate of 3% over the next five years. they expect to earn an annual rate of 5% on the money market fund. all other prices, including utilities, maintenance, and taxes are expected to increase at a 3% annual rate. after federal, state, and local taxes, they get to keep only 55% of a marginal dollar of earnings. estimate whether it is financially more attractive for the bergholts to rent or to purchase the home over a five-year holding period. (assuming the contract interest rate of 8%, monthly interest payments over the five-year period would total $87,574.) suppose it turns out that they have to relocate after one year. which is the preferred alternative after one year? (interest payments over the first year would equal $17,852.)

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Kim and dan bergholt are both government workers. they are considering purchasing a home in the washington d.c. area for about $280,000. they estimate monthly expenses for utilities at $220, maintenance at $100, property taxes at $380, and home insurance payments at $50. their only debt consists of car loans requiring a monthly payment of $350. kim's gross income is $55,000/year and dan's is $38,000/year. they have saved about $60,000 in a money market fund on which they earned $5,840 last year. they plan to use most of this for a 20% down payment and closing costs. a lender is offering 30-year variable rate loans with an initial interest rate of 8% given a 20% down payment and closing costs equal to $1,000 plus 3 points. before making a purchase offer and applying for this loan, they would like to have some idea whether they might qualify. estimate the affordable mortgage and the affordable purchase price for the bergholts. suppose they do qualify; what other factors might they consider before purchasing and taking out a home mortgage? what future changes might present problems for the bergholts? the real estate agent tells the bergholts that if they don't care to purchase, they might consider renting. the rental option would cost $1,400/month plus utilities estimated at $220 and renter's insurance of $25/month. the bergholts believe that neither of them is likely to be transferred to another location within the next five years. after that, dan perceives that he might move out of government service into the private sector. assuming they remain in the same place for the next five years, the bergholts would like to know if it is better to buy or rent the home. they expect that the price of housing and rents will rise at an annual rate of 3% over the next five years. they expect to earn an annual rate of 5% on the money market fund. all other prices, including utilities, maintenance, and taxes are expected to increase at a 3% annual rate. after federal, state, and local taxes, they get to keep only 55% of a marginal dollar of earnings. estimate whether it is financially more attractive for the bergholts to rent or to purchase the home over a five-year holding period. (assuming the contract interest rate of 8%, monthly interest payments over the five-year period would total $87,574.) suppose it turns out that they have to relocate after one year. which is the preferred alternative after one year? (interest payments over the first year would equal $17,852.)

Ask Clark Howard at www.clarkhoward.com that's his specialty.

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Kim and dan bergholt are both government workers. they are considering purchasing a home in the washington d.c. area for about $280,000. they estimate monthly expenses for utilities at $220, maintenance at $100, property taxes at $380, and home insurance payments at $50. their only debt consists of car loans requiring a monthly payment of $350. kim's gross income is $55,000/year and dan's is $38,000/year. they have saved about $60,000 in a money market fund on which they earned $5,840 last year. they plan to use most of this for a 20% down payment and closing costs. a lender is offering 30-year variable rate loans with an initial interest rate of 8% given a 20% down payment and closing costs equal to $1,000 plus 3 points. before making a purchase offer and applying for this loan, they would like to have some idea whether they might qualify. 1. estimate the affordable mortgage and the affordable purchase price for the bergholts. 2. suppose they do qualify; what other factors might they consider before purchasing and taking out a home mortgage? 3. what future changes might present problems for the bergholts? the real estate agent tells the bergholts that if they don't care to purchase, they might consider renting. the rental option would cost $1,400/month plus utilities estimated at $220 and renter's insurance of $25/month. the bergholts believe that neither of them is likely to be transferred to another location within the next five years. after that, dan perceives that he might move out of government service into the private sector. assuming they remain in the same place for the next five years, the bergholts would like to know if it is better to buy or rent the home. they expect that the price of housing and rents will rise at an annual rate of 3% over the next five years. they expect to earn an annual rate of 5% on the money market fund. all other prices, including utilities, maintenance, and taxes are expected to increase at a 3% annual rate. after federal, state, and local taxes, they get to keep only 55% of a marginal dollar of earnings. 4. estimate whether it is financially more attractive for the bergholts to rent or to purchase the home over a five-year holding period. (assuming the contract interest rate of 8%, monthly interest payments over the five-year period would total $87,574.) 5. suppose it turns out that they have to relocate after one year. which is the preferred alternative after one year? (interest payments over the first year would equal $17,852.)

i don't know i hate math!!

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Kim and dan bergholt are both government workers. they are considering purchasing a home in the washington d.c. area for about $280,000. they estimate monthly expenses for utilities at $220, maintenance at $100, property taxes at $380, and home insurance payments at $50. their only debt consists of car loans requiring a monthly payment of $350. kim's gross income is $55,000/year and dan's is $38,000/year. they have saved about $60,000 in a money market fund on which they earned $5,840 last year. they plan to use most of this for a 20% down payment and closing costs. a lender is offering 30-year variable rate loans with an initial interest rate of 8% given a 20% down payment and closing costs equal to $1,000 plus 3 points. before making a purchase offer and applying for this loan, they would like to have some idea whether they might qualify. 1. estimate the affordable mortgage and the affordable purchase price for the bergholts. 2. suppose they do qualify; what other factors might they consider before purchasing and taking out a home mortgage? 3. what future changes might present problems for the bergholts? the real estate agent tells the bergholts that if they don't care to purchase, they might consider renting. the rental option would cost $1,400/month plus utilities estimated at $220 and renter's insurance of $25/month. the bergholts believe that neither of them is likely to be transferred to another location within the next five years. after that, dan perceives that he might move out of government service into the private sector. assuming they remain in the same place for the next five years, the bergholts would like to know if it is better to buy or rent the home. they expect that the price of housing and rents will rise at an annual rate of 3% over the next five years. they expect to earn an annual rate of 5% on the money market fund. all other prices, including utilities, maintenance, and taxes are expected to increase at a 3% annual rate. after federal, state, and local taxes, they get to keep only 55% of a marginal dollar of earnings. 4. estimate whether it is financially more attractive for the bergholts to rent or to purchase the home over a five-year holding period. (assuming the contract interest rate of 8%, monthly interest payments over the five-year period would total $87,574.) 5. suppose it turns out that they have to relocate after one year. which is the preferred alternative after one year? (interest payments over the first year would equal $17,852.) show all work for each assignment and explain each step carefully.

Grade A+++ GIVENS solution BUYING HOME PURCHASE PRICE: $ 280,000.00 MORTGAGE PRINCIPAL : 20% (.20) D/p FROM $280,000.00 $ 224,000.00 TERM 30 YEARS INTEREST RATE0.08 APR MONTHLY PAYMENT $ 1,644.00 SELLING EXPENSE ( assuming 7% for the sales agent)0.07 CLOSING COSTS AFTER TAXES $ 1,000.00 ANNUAL PROPERTY TAXES :$ 380.00 X12 MONTHS. $ 4,560.00 ANNUAL HOMEOWNERS REPAIR/MAINTENANCE:$100.00 X 12 MOnths. $ 1,200.00 ANNUAL HOMEOWNERS INSURANCE: $50.00 X 12 MONTHS $ 600.00 RENTING RENT (PLUS) UTILITIES $ 1,400.00 RENTERS INSURANCE: $25.00 X 12 MONTHS $ 600.00 COMMON FACTORS ANNUAL FUEL AND UTILITIES : $220.00 X 12 MONTHS $ 2,640.00 MARGINAL TAX RATE : 55% $ 0.55 TAXES ON CAPITAL GAIN $ - BEFORE TAX RETURN ON INVESTMENT $ 0.05 INFLATION RATE $ 0.03 ONE YEAR COMPARISON ==================== BUYING GROSS GAIN OR LOSS BUYING APPRECIATION $282,000 x .03 rise of annual fee $ 8,400.00 SELLING EXPENSES: 280,00+8,400.*.07= 20,188.00 $ 20,188.00 CAPITAL GAIN OR LOSS (loss) Explanations: $20,188.00 - $8,400.00= $ (11,788.00) TAXES ON CAPITAL GAIN $ - RENTNG - $ 0.00 (ZERO) ANSWER: YOU SAVED $28,338.00 BY RENTING.