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Do You Have Purchasing Power?

As the housing market continues to show signs of recovery, I have recently run into a large volume of Homeowner’s who are looking to “Buy Up” and wanting to place offers on their next home, without selling their current home. The home buyer feels like making the best offer, “Non-Contingent” on the sale of their current home, which puts them in the best position for a seller to accept their offer.

Sounds good?

Maybe… You can possibly run into complications on getting your loan approved with your new lender if you are not aware of new, asset reserve requirements when it comes to buying a home while keeping your old home. In the following article / blog, I’m going to share my 3 easy steps for you to take if you fall into this home-buying category and show you how it can help take some stress off your next home purchase.

No two Loans are exactly the same…

Every loan has it’s own unique characteristics because every home-buyer has a different set of circumstances when applying for the loan. These days it’s important to understand “what” a lender is looking for when a Borrower is taking a loan application. In the introduction above, I have experienced an increase in home owners wanting to buy their next home, while keeping their existing home in order to facilitate a “non-contingent offer”, (This means their offer to buy the home is not depending on selling their existing home). You need to be careful because Banks and the rest of the Loan Industry fears that you are going to buy the new house, and “Ditch” the old house and allow it to foreclose. This “Buy and Ditch” scenario is on every lender’s mind, so word of caution: be prepared to answer some detailed questions when buying a home while keeping your home.


Cash is King

One of the most important parts on buying a new home when keeping your old one is to find out about the amount of cash assets you need to have in reserves. Cash assets can be Checking, Savings, Money Market Funds, 401K and various liquid able assets that you need to show outside of your down payment resources. This requirement will depend on the type of loan you are getting as well as your overall qualifications for your loan, (Credit Scores, Qualifying ratios, Income stability, etc.). Some loans require as much as six mortgage payments in reserve for both the new and current house payments, while others allow as little as three


Solution: Get Pre-Approved

My third and final recommendation when you are thinking about buying a home while keeping your old one is to get your loan application started as soon as you can. Having the piece of mind with an experienced loan officer to navigate through all scenarios is well worth the effort. I can offer you a free, no-obligation pre-approval program to help you match up the best financing terms for your next purchase without the stress of having a “real-life” home purchase pending.

Loan Approval

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For more information on this pre-approval service, contact me the following ways: Email me: or call me at (619) 807-0287 or visit my website, click here