Recently purchased first home and moving to another state?
I purchased my first home a few months ago and will be moving to another state due to a better job offer. I know that trying to sell my home may not be in my best interest since I just got it, however, if I do – there is no pre-payment penalty on my loan.
My question is: Am I better off selling my house (have about $25k in equity) or renting it out and trying to buy a second home in the new state? Would I be able to buy a second home with having this first one? I have been told that I should be able to as long as I can prove the first one is rented out. Is this correct?
I go back and forth with selling because if the job offer doesnt work out, then I would always have a place to come back to if needed. If this would help in providing your answer – I currently live in Texas and will be moving to Colorado.
I would prefer answers from people who have mortgage/lending/real estate experience.
If you may return, keep it. Hopefully you can pretty much cover your mortgage with what you would charge for rent (and I think you might be able to, Texas still has low pricing, therefore your mortgage should be relatively low). And Texas is a long term state, but property value IS going up.
Before you go, you can also interview and choose the renter yourself, which is nice, instead of relying on a property management company to find you one.
Your loan for your new house (since you will be living there) will obviously be a primary residence loan, so that wold be up to a lender to work out the two. You have already closed escrow on your Texas house as primary, so yes, you would have to produce a rental agreement of some kind and let the underwriters at the bank sort it out. (You definitely have it in your favor that you are telling the truth on all this, most investors, myself included, have had to jump throughhoops and crazyness with double loans in other states and owner occupied clauses, etc.). You will also haveto show proof of work in the state, etc. to close primary on your CO home.
Generally though, the most expensive of the two homes you own willend up being your primary residence (in the bank’s eyes). You need to go over all of this with a loan officer (a smart and talented one who knows what they are talking about).
The $25k in equity may not be as much as you think. Once you sell, minus 6% for brokerage fees and another $2k or so (I’m not familar with TX title fees) for sellers closing costs.
Texas hard money lenders
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