Question About Two Mortgages
I am about to close on a house(primary residence) in 2 mons and i am approved for a loan of about 300k, I came across a house for sale(about 400k) which is below market price if i buy and quickly flip it i can make some good money on it, The problem is getting the mortgage. Since i am already approved for that loan(primary residence) can i apply with a diffrent lender and get approved.
If i do this way i will be stuck with two mortgages which is fine since i will be selling the other house very quickly, But if any of the two lenders come to know about it, will it be a problem?
Yes, being a broker myself you technically could do it. But on the other hand, you would never want to do anything that would necessarily jeopardize the other loan. What will probably happen, is the lender will pull your credit again right as you are about to close and probably see some inquiries from where were credit was pulled from the investment prop. mortgage. They will probablyy make you sign an affidavit stateing that you have not opened any other accounts. If you cannot sign that truthfully, you will have to say YES, I have opened a mortgage, and that new payment (regardless if you have the intent to sell) will be calculated in your DTI. And unles you have an extremely low DTI right now, that will skyrocket your DTI.
Another alternative is to use private financing that does report to the credit bureau AFTER you have applied for your home loan. Get your credit report and give it to the private party to prevent from any new inquiries on your credit. Close after your loan is done on the conventional home to prevent public record problems from arising.
The higher cost is worth the safety.
Welcome to the second mortgage business. A rude awakening.
What are you going to do more than the current borrower is doing allready? You strat to foreclose and then run the price down, exposing your investment to loss. A lot like cutting your nose off to spite your face, huh?
Note investing is long term. You make a 3 month loan, better plan on being in it 18. If you get paid off earlier, great. Sit tight. Its almost spring and you have a cooperative borrower (in the sense that they are selling the property at least).
Patience is a virtue.
Good luck