Can I get pre-approved if I already have a mortgage in Ohio?

Rodney Reynolds with Ruoff Mortgage

This is Rodney Reynolds, your mortgage guy in Ohio. Hope you all are doing well today.

So or mortgage topic is, “What do you do If you currently own a home and you want to buy a new one?”

What options are available to you? Well, the first thing you should do is get with your real estate agent and with your lender and have a conversation as to the options available to you. That way, everyone’s on the same page. And it’s, pertinent that your mortgage information is relayed to your agent. Because when your agent is writing an offer, he or she has to let the listing agent know whether this is a contingent offer on the sale of your current residence or whether you’ll qualify to carry two mortgages. Very important that we do a pre-approval upfront.

Once again, the whole goal of being pre-approved is so that we’re all on the same page and we can alleviate any potential unneeded stress during this transaction.

So What Mortgage Options Are Available When You Own a Home

Home Equity Line Of Credit

Well, for one, if you currently own a home and you have equity in your home, you can take out a line of credit to pull some of the equity out to put down on your new home. Now you’re only making an interest-only payment. So for instance, if you wanted to borrow $50,000 off a line of credit, your payment will be around $150 a month. That’s it.

So if you could qualify to carry your current mortgage and that line of credit along with a new mortgage, that’s an option available to you. And then, after you close, you can sell that current home if that’s what you want to do with it.

Get a Lease Agreement On Your Current House

Another option is you keep the current home, and now we get a lease agreement to rent it out. We can use 75% of the projected lease agreement as income.

The lease agreement may offset that mortgage payment altogether. That’s option two.

Utilize IRA or 401K

Another option is if you have investments like an IRA or a 401k. Buying a home is one of the reasons that constitutes an early withdrawal, and you could put that money back in within six months with no penalties.

So when using the IRA or 401K option you have to talk to your investment banker about or pull up the terms of your agreement for early withdrawal. It will spell those terms out to you.

Mortgage Recasting After You Sell Your Existing Home

Conclusively if you’re going to buy a home and then sell your home after the fact, here’s another option that you can take advantage of as well. It’s called a mortgage recast. So let’s just say, for instance, you’re buying a home, and the payment is higher than you’re comfortable with. But you know, once your home sells, you’re gonna put down X amount of dollars.

Well, what happens is, as long as you recast your mortgage within 120 days, the lender/bank will let you recast or re-amortize your mortgage. So if your initial mortgage is $200,000, you sell your home, and you put down an additional hundred thousand, you’ll have a new payment re-amortized at a hundred thousand dollars, which you’re comfortable with.

Mortgage Recasting is a beautiful option that’s available to you if you don’t wanna wait for your home to sell before you buy your next home and you can qualify to carry two mortgages.

Bridge Loans

Also, bridge loans are available. A bridge loan is not like it was a few years ago because of the time period we’re living in, where financing has become more stringent. Most banks don’t offer bridge loans, but there are a few out there that do. And so a bridge loan may be an option available to you as well. So you will need to check with your local lender regarding obtaining a bridge loan.

So those are just some of the options available to you if you already own a home and you’re looking forward to purchasing a new home. This is Rodney Reynolds (RR), your mortgage guy. Have a great day.

Email: rodney.reynolds@ruoff.com

Direct Line: 440-882-5403 | Fax: 440-398-8173

NLMS # 190606 | LO# 036126.000 | MB# 803389.000

Are you looking to move and currently own a home? Contact us today at (440) 628-1321, and we can explore your mortgage options.

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