Investor · San Diego, CA · Member since 2013 · 52 posts · 44 votes
Hi BP people!
My wife and I want to purchase a single family home to occupy as our primary residence in CO Springs. We are from San Diego and are wondering if anyone has been able to close on a property out-of-state before physically moving there. We would like to use FHA or low down payment conventional financing, so purchasing as an investment and then moving there is not ideal (or legal based on mortgage fraud I would think).
I spoke with a lender and they were saying they cannot loan on CA income. Is there a way to close on a property before we move so that we are not having to move twice (once in a temporary living situation renting, and once when we close on a property)?
Rental Property Investor · MO · Member since 2019 · 13 posts · 8 votes
6y
@Ron Trinh
I purchased a primary residence in October 2018 before moving out to Missouri. My lender required current employer paystubs and the offer letter (with no contingencies) from my new employer. It was not an easy process but I had a lot of moving parts.
Contractor · Nashville, TN · Member since 2014 · 1k+ posts · 1k+ votes
6y
Wouldn't you just have your mail sent there to show residency after closing? I'm not sure what the question is. Just buy it and move there as soon as you can.
if it's more than a month tho, I would question the financial wisdom behind buying a house to sit vacant. Just wait until it's almost time to move.
Investor · San Diego, CA · Member since 2013 · 52 posts · 44 votes
6y
Allan - The lender is requiring 30 days paystubs to qualify my wife's income for the mortgage as they cannot underwrite her CA salary. This means she has to get a new job (works in a lab) in CO before we can close on a place. Which also means we would need to live in CO so she can work 30 days before we can buy. And that means we would need to rent before we buy.
I am wondering if there is a way around this so we can avoid moving twice. Is it a matter of calling enough lenders until we find one that can use her CA W-2?
Mortgage Broker · Dallas, TX · Member since 2017 · 657 posts · 275 votes
6y
Yes, we would never use her CA income because she would not be working there if moving to CO. Only way that would work is if her company allowed her to work from home or was “stationed” in CO in someway. Since working in a lab there would be nothing to support that was possible.
You have one of two options of than the one your just said. Purchase home as an investment property or see if you can purchase it as a second home. Both of which would mean you need to support two homes if you currently own one.
Investor · San Diego, CA · Member since 2013 · 52 posts · 44 votes
6y
@Nicholas Covington - Yup, I completely understand the premise of not underwriting her CA income. We are currently renting so the second home option is not available to us either. From what I am hearing, it looks like we need to rent first when we get there then.
@Theresa Harris I do not believe my income will qualify as I am self-employed with less than 1 year of history.
Fleming Island, FL · Member since 2020 · 15 posts · 11 votes
6y
@Ron Trinh
I was in a similar situation. What we did was, I found a job in the other state, stated with some friends for the month, and worked on finding and closing on the house. Once we closed, wife and kids moved down. We kept most of our stuff in a local storage unit. The other option we considered if we couldn’t stay with friend was to get a hotel for the moth or so. Good luck, hope it all works out for you.
Investor · Las Vegas, NV · Member since 2013 · 8k+ posts · 10k+ votes
6y
You could ask a couple lenders if some kind of “this person has a job when they get here letter” would work. It has been more than a decade since we moved our primary out of state but both times my wife, an RN, simply supplied a letter saying she would be hired effective this date at this pay. But as I say it was 10 years ago, what was common then may no longer be available.
Investor · Del Mar · Member since 2014 · 88 posts · 21 votes
6y
@Ron Trinh My suggestion would be to rent for six months in CO Springs and then buy. Yes there might be lenders who would still give you a loan but it will limit your choices.
Investor · San Diego, CA · Member since 2013 · 52 posts · 44 votes
6y
@Vish Iyer I agree. It might just be a matter of finding the right lender who is willing to work with us. Renting for 6 months would be less than ideal, personally. I spoke with a few RE agents in the area and leases lower than 1 yr are pretty hard to come by as well.
Rental Property Investor · MO · Member since 2019 · 13 posts · 8 votes
6y
@Ron Trinh
I purchased a primary residence in October 2018 before moving out to Missouri. My lender required current employer paystubs and the offer letter (with no contingencies) from my new employer. It was not an easy process but I had a lot of moving parts.
Architect · College Station, TX · Member since 2018 · 6 posts · 2 votes
6y
@Ron Trinh
I am trying to do the same thing as we speak (moving from Hawaii back to Texas) and am currently looking at duplex's and 4plex's with hopes to go the 203K FHA loan route. I have an accepted offer from a company in Texas and my mortgage broker told me she could use my offer letter with no contingencies (as @Chris Mantell mentioned) showing salary and starting date. I also had to show my last two years W-2s but that's pretty standard. Other than that pretty straight forward.
You might already know this but you can use FHA to purchase up to 4 units on the same property and lenders will count about 75% of the rental income (basically counts as your income) to offset the PITI (principal, interest, tax insurance). It's crazy that it might be easier to qualify for a more expensive property because of the rent potential. Something to consider if your purchasing a property with an investment mindset.
Investor · San Diego, CA · Member since 2013 · 52 posts · 44 votes
6y
@Joe Hamiter Hope it goes smoothly! Would love to hear how it all pans out when everything is settled.
And yup, I have heard of those loans too. Our income shouldn't be an issue for the price point of houses were looking at thankfully. Thanks for the suggestion!
Architect · College Station, TX · Member since 2018 · 6 posts · 2 votes
6y
@Ron Trinh will definitely post how it pans out!
I was just mentioning that option because if you can stand living in a duplex or 4 plex then you get all that free equity from your renters and might even be able to live for free. The deal I’m currently looking at would add an additional $1500/month to my net worth (not not even counting appreciation over time) without doing anything other than buying the two or three extra units. Then when you’re ready to move you can put a renter in your unit and hold the property for cash flow and equity. Something to consider depending on your goals.
Investor · San Diego, CA · Member since 2013 · 52 posts · 44 votes
6y
@Joe Hamiter That is a good point. Will definitely have our realtor show us some small multifamily properties too when we visit in April. I think my wife and I are just super excited to have a garage and a yard so we are leaning towards SFR with a basement to rent out.