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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: Shropskr on October 09, 2014, 11:09:20 AM

Title: Home buying question
Post by: Shropskr on October 09, 2014, 11:09:20 AM
Ok we're looking at moving.  We own free and clear a home in Seattle.  How do we go about buying a home in portland?  Husband is employed in Seattle until probably December 31. Unless he quits even sooner.   He HATES his work. We have FU money, but not enough for a whole new house.  We could do a 20% down but how do you get a mortgage with no job?

We plan to sell the Seattle house over the summer.

O and just for fun there are two kids in school 1st and 5th grade.
Title: Re: Home buying question
Post by: dandarc on October 09, 2014, 11:18:50 AM
Why are you moving to Portland with no job and not enough to retire on?  Husband out of work, when you still need the income, seems like a strange time to move, particularly when you are living in a paid-off house.

If you do move, delay it until after you sell the Seattle house.  With no income, and not enough money to pay the balance, the bank is probably right to deny the loan - no clear way you can make the payments.
Title: Re: Home buying question
Post by: Caella on October 09, 2014, 11:24:48 AM
If you really want to move, why don't you rent until the Seattle house is sold? That way you don't deplete your FU money completely, and can live off it until you or your husband find a new job in Portland.

How many months of expenses you have on your FU fund? I would be careful with this change, really plan your expenses, and leave a good chunk for "what-if's"
Title: Re: Home buying question
Post by: frugaliknowit on October 09, 2014, 11:47:33 AM
Assuming you have less than 2 years FU money and assuming you are a SAHM, husband needs to find a new job in Portland before you do ANYTHING.  You don't want to be owning and or renting 2 residences while unemployed, regardless of whether they are paid for.  The length of time it will take for him to secure employment is an unknown.
Title: Re: Home buying question
Post by: Shropskr on October 09, 2014, 01:14:33 PM
Ok one question at a time.

We want to go back to Portland that's where family is.  We only planned to be in Seattle maybe ten years it's been that.

No job does not mean no income.  I receive a monthly Income from the VA.  With a paid off home we can live entirely under this amount.  We want more for our desired level of final retirement.  Ie money for more vacations and fun.

Husband will look for job from Dec till June's/July. It would be ideal to have one lined up and move with him employed we agree.  This is the best case scenario.

If I can figure out the Roth conversion pipeline there's Almost enough FU money for indefinite living were about $150,000 short of our desire number.   
Husband says he is looking for probably his last job.  Plus he WANTS to work for 4-5 more years.  That's more than we need.

We could rent but that could cause changing schools twice.  My 5th grader has Aspergers/Autism and change is hugely hard.  He lives by schedules even in the summer.

The seattle house is most likely worth more than the portland home will be.  There is enough money in iras and 401k to pay for a house in portland.  I do not have enough money in taxable accounts to pay for a second house outright.

.???  How do I make this work?

Title: Re: Home buying question
Post by: dandarc on October 09, 2014, 01:44:21 PM
Option 1 - sell Seattle house with an arrangement to rent afterwards.  Harder to find a buyer, but if you rented your existing house for a month or two while looking for house in Portland, would solve the cash-flow dilemma, and allow you to move once.

Option 2 - arrange for near-simultaneous closings.  Talk to a realtor - this kind of thing can be done, where you sell house A, and buy house B on the same day.

Have you actually talked to a bank?  Because with a steady VA check and your other assets, you might also be able to swing a mortgage and go with your 'own two houses briefly' plan.  Try smaller banks and credit unions.

You might even find a bank willing to do a mortgage or HELOC against the Seattle house - take that money, buy house in Portland, move, and then sell Seattle house quickly.
Title: Re: Home buying question
Post by: Shropskr on October 09, 2014, 02:53:53 PM
We have not talked to bank yet.

We're wondering do we get a heloc on the Seattle house before husband quits.  Buy portland house outright?

Try to get mortgage on house in Portland us seattle house or iras as collateral if need be.  We have 20% for down payment.

Attempt"bridge"loan. Need to figure out how that works.

Rent and pray for  same school for son.

That's what I need the help for. I've never sold a house.  This is our first house we've ever owned.  How do you move from one house to another with kids involved?
Title: Re: Home buying question
Post by: dandarc on October 09, 2014, 03:11:17 PM
Talk to a Realtor - they can walk you through the process and all of the options - this is really where a good Realtor can add a lot of value for you.  People do this kind of thing all the time.
Title: Re: Home buying question
Post by: Siobhan on October 09, 2014, 03:28:58 PM
Actually Seattle has a large military population, so finding someone to buy with option to rent may not really be that hard.  We did that on our move to VA...bought the house 2 months before moving (did I mention DC's market is insane) and they "rented" it until we PCS'd
Title: Re: Home buying question
Post by: Siobhan on October 09, 2014, 03:41:19 PM
I wouldn't get a mortgage on the Portland house, they will require a letter from his current employer stating that he will have continued employment etc (we recently purchased another house and this was required on both of our mortgages since 09), which could raise some red flags at his job.  Heloc is an option while he is still employed.  Check out a GIS system for your county, they usually will have the school districts outlined so you can know what address boundaries to look in if you decide to rent.

Honestly your best bet is to sell the Seattle house, then use the proceeds to buy the one in Portland, in your offer document you can hinge the purchase of the Portland house on the successful sale of your one in Seattle, giving you an easy out if the Seattle buyers fall through, and it's fairly common to add that clause.  Your autistic son will be an issue.  I suggest researching school districts in Portland before you start looking/selling.  Call or preferably go see the heads of the ones you would be interested in him going to school at.  Go meet them, introduce your son to them, explain any behavioral issues etc and clear the air before you put your house on the market, work those trips into his schedule.  When you feel comfortable with a certain school, limit your property search to ONLY that district, then sell, buy, move.  Your son should already be familiar with the school/leaders so the transition may not be as hard.

Title: Re: Home buying question
Post by: Spork on October 09, 2014, 03:47:25 PM

You might also talk to smaller/more local banks if you're looking for a mortgage or bridge loan on the Portland house.

We bought a property none of the major banks/mortgage companies would touch.  It didn't fit their mold.  We talked to a local bank.  The loan officer was one of about 5 VPs.  They made it happen and it was painless. 
Title: Re: Home buying question
Post by: retired? on October 09, 2014, 07:05:17 PM
Can you simply buy in Portland while your husband is still employed?  The bank will likely ask if this is a move for work, etc., but since you own the home free and clear in Seattle, listing that first shouldn't be a problem with the bank.

My rec, to get things done, aside from whether you should or not, would be to say you are moving to Portland to be closer to family and there is no job change (only 150-180 miles, right?). 

Thinking this through...."hi bank, we are moving to Portland and would like to buy with 20% down"  "ok, send us your W-2s, last two years 1040's, recent pay stubs" "no problem".

I don't know that banks verify income beyond using stubs and W-2's unless you have moved to a new employer.  You'd be presenting a current employer as the source of income.  Check it out and see what happens.  You'd do that anyway to have a pre-approval letter anyway.

I love Portland.  Good luck.
Title: Re: Home buying question
Post by: forummm on October 10, 2014, 09:07:57 AM
A good realtor or mortgage broker in Portland should be able to help you with this. This has to happen frequently. But you could also just take out a mortgage or HELOC on the Seattle house to have the cash to purchase in Portland with no mortgage. It'll cost you something to take out a loan (even with HELOC you'll have to pay for an appraisal, and perhaps for a closing attorney).
Title: Re: Home buying question
Post by: Shropskr on October 10, 2014, 10:57:37 AM
Thank you

Looks like I need to talk to a realtor and a mortgage lender.