Mortgage/Real Estate Questions

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CaptainMarvel
Posts: 13
Joined: Thu Jan 15, 2015 2:01 am

Mortgage/Real Estate Questions

Post by CaptainMarvel » Wed Jan 18, 2017 2:43 pm

I'm about to move from California to Texas as a result of a job relocation. My company will be paying for the moving expenses as well as some other expenses related to the move. I'm hoping to complete the move by April/May. A couple of questions:

1) Since we need to sell our property here in California and buy a single-family house in Texas, have any of you had to sell one house and buy another house within a short amount of time like this? If so, have you either: bought the new house first and then sold your old house; sold the old house first and then bought the new house; or tried to do both simultaneously?

I've read some of the pluses and minuses of the options above. We are leaning towards waiting to make an offer on the new house until after we have accepted an offer for the sale of our existing property in California. My company will provide two months of paid temporary housing in Texas so we do have some leeway on the back end just in case we have to move out of our current property but the purchase of the new house in Texas isn't finalized. In the worst case scenario, we can afford to pay two mortgages (although I'd obviously like to avoid this for anything beyond 2-3 months).

2) Does anyone know if, when the lender reviews our finances for the mortgage application and in particular the debt/income ratio, they'd use our "gross" income or our "net" income?

Thank you.

Ace$
Posts: 32
Joined: Wed Jan 11, 2017 11:07 am

Re: Mortgage/Real Estate Questions

Post by Ace$ » Wed Jan 18, 2017 5:48 pm

I've bought/sold a home closing the same day twice - it's very stressful and those were both "local" moves.

I'd be tempted, in your case, to sell the CA house, move into temporary housing, and then possibly rent another 6-12 months beyond that. CA to TX is a major move not only physically but culturally. You really want to learn the area before buying a home in my opinion. It will also remove the stress of having (possibly) an unsold house in CA with a pending purchase in TX (unless the employer is eliminating that concern). Either way - I'm going to learn the area prior to buying.

sls239
Posts: 918
Joined: Thu Oct 23, 2008 4:04 pm

Re: Mortgage/Real Estate Questions

Post by sls239 » Wed Jan 18, 2017 6:06 pm

Yes, yes, and yes. We've done all 3.

But the only reason we were quick to buy this last time is because we were moving back to a place we had lived before, so we already knew the area.

For a new area, you'll want to get to know it before purchasing. Even if that means, as it sometimes does, that children will have to switch schools twice (elementary districts can be very small geographically!).

And they will use your gross income. We've arranged it before where we reduced 401(k) contributions early in the year to get more cash, then caught up after the sale when through.

ETA - But since Texas has no income tax, you might not want to do that, you might want to push 401(k) contributions now, if you can swing it.

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