Dear Rhonda “Is this a second home or primary residence”?

mpj038267400001I recently received this question from one of my readers:

Dear Rhonda,
I am looking for information about the general way loans are done related to primary residence or second home.

I currently own 2 duplexes. My wife and I are renting and working in a location that is around 130 miles away from the location the home we want to buy is located. My wife has no loans in her name and was able to qualify due to good credit and job at current location 130 miles from home we want to buy. We are trying to buy a place that is far from our work with the plans of moving to this location.

“Lender one” wants to do the loan as a primary residence and get us a better rate.

“Lender two” feels we must do the loan as a second home for it to be approved.

What is right here? Is it possible that one lender can only do it one way with the banks they work with and the other could do it another way. I hope you respond to this because were being told two different things and want to do what is right. Thanks.

Dear Reader,
For starters, I cannot give legal advice and really cannot give underwriting opinions as I’m not an attorney or an underwriter. Different banks or lenders may have different underwriting guidelines and/or underwriting overlays.

In my opinion, I would think an underwriter would have questions about how a home that is 130 miles away from your jobs could possibly be your “primary residence”. In order to qualify as a primary residence, you must occupy the home within 60 days from closing.  Most people would not want to do a 13o mile commute! 😛

If you are NOT going to rent then home out, then I believe it’s possible it could be viewed as a second or vacation home. Again, this is up to an underwriter. Since you already have a couple rentals, an underwriter may ponder how likely it is that the new home may actually wind up as an investment property and not a second home. The underwriter will also consider the property type of the new home as well as the location.

Bottom line, it’s the underwriters call. If I were you, I would ask both lenders if an underwriter has reviewed your scenario and if not, see if they will do this before you get too deep into the transaction and wind up finding out that the only way you can get financing may be as an investment property.

Good luck!

Converting your existing home to a rental property

mortgage porter sold home

If you are buying your next home, you may be considering converting your existing home into a rental or second home. The lender on your new home will have different requirements depending on what type of financing you’re obtaining. [Read more…]

VA Appraisal Fees and Turn Times Increased

seesawVA manages how much a Veteran can pay for an appraisal and sets time lines on how long a VA appraisal can take. The fee for Washington state has been $500 for an appraisal with up to 10 days for the appraisal to be delivered. Before the appraisal crisis, many would often complain about how long it took to get a VA appraisal…however, 10 days to receive an appraisal for $500 would  now be a dream come true. [Read more…]

Freddie Mac PMMS reports mortgage rates at a 10 week low

Today Freddie Mac released their Prime Mortgage Market Survey which reports average conforming mortgage rates from last week.


From Freddie Mac Chief Economist, Stan Becketti:

“Investors flocked to the safety of government bonds causing the 10-year Treasury yield to continue its descent following the FOMC’s decision to leave rates unchanged. The 30-year fixed-rate mortgage responded by dropping 6 basis points before landing at 3.42 percent — a ten-week low. The course of the economy is uncertain, yet consumers continue to be a bright spot. The September consumer confidence index is up 3 percent to 104.1, exceeding forecasts and reaching a new cycle high.”

So if you’ve been sitting on the fence, contemplating a refinance – there’s no time like right now.

If your home is located anywhere in Washington state, where I’m licensed, I’m happy to help you. 🙂


Avoid Delays with your Home Purchase

mortgage-porter-sold-homeHere are a few suggestions for when you are preparing a purchase and sales agreement to help avoid delays. NOTE: I’m NOT an attorney and this is NOT legal advice. I’m simply a Licensed Loan Officer offering suggestions based on my observations.  🙂 [Read more…]

Appraisal #FAIL

A fisheye image of a mid-30's business woman pouting and looking angry.If you are buying, selling or refinancing a home right now, you might be quite surprised to learn about the current state of appraisals. It ain’t pretty…far from it. [Read more…]

Mortgage rates remain low following the Jobs Report

This morning the August Jobs Report came in with slightly weaker data than expected with only 151k non-farm payroll jobs added.

Yesterday, Freddie Mac released their PMMS report showing the 30 year fixed conventional rate still hanging around (just below) 3.500%.

2016 09 01 pmms

If you’ve been contemplating refinancing, it could be time to get off your duff! If your home is located anywhere in Washington state, I’m happy to help you. Click here for a no-hassle mortgage rate quote.

PS: Our office will be closed on Monday for Labor Day. I hope you have a wonderful holiday weekend!

Friday Flashback: Mortgage Rates from 15 years ago

My husband and I have been cleaning out the garage and I came across an old mortgage rate sheet from August 2001. Mortgage rates were a bit higher 15 years ago. If you paid a 1% discount point, your rate for a 30 year fixed would have been 6.500% on a 30 day lock.

[Read more…]