Conversion Of Your Principal Residence
There are some Fannie Mae guideline changes going into effect this coming August. The change are regarding the conversion of your principal residence into a second home or investment property. Currently if you have 30% of equity into your property you are required to have 2 months of reserves for each property you will own, if you have less than 30% equity then you are required to have 6 months of reserves on each property.
As of August 15, 2015 the new guideline will be that regardless of how much equity you have in the home, if you choose to buy a new home, making your current property a second home or an investment property, you will only need 2 months of reserves for each property.
This is exciting news and will help many of us have more options in choosing to retain our current property and purchasing a new primary residence.
Now bear in mind that not all investors may adopt this change, investors can always have their own overlaying guidelines, so this is where choosing the right lender can help you and can give you access to the right investors for your needs.
As always, if you have any questions or would like to get pre-approved, please give us a call.