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Author: Dwdonhoff Big gold star, 5000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 127567  
Subject: Re: Where to put money from selling house? Date: 9/10/2001 12:41 PM
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Hi annemette,

I'm selling my house. I've lived in it a little over 1 year. I'll be living with my mom (rent free!) until I buy another house--probably in a year or two

I'm offering unrequested advice from the experience of a mortgage broker who's tried to finance someone EXACTLY like YOU;
1) Perfect credit,
2) Boatloads of cash,
3) NO RENTAL TRACK RECORD (LIVED AT HOME W/MOM.)

Do yourself a *BIG* favor, and pay Mom fair rent. Do it with a check written on the 20th or 25th of each month for the next month... just like any other landlord (well, treat her BETTER than most treat their landlords.)

Select an amount that is reasonable, but high. Eventually when you apply for your new home purchase the underwriters WILL consider something called "payment shock," which is 'how much higher your mortgage will be above what you're used to paying.'

Have Mom DEPOSIT the checks each and every month so you can get a copy of the CANCELLED check from the bank for your records to prove timely payment. (If Mom then slides you some cash back and nobody knows about it, I certainly wouldn't be able to tell the underwriters, would I? *wink*)

Whenever you go for your next home, you'll most likely need 24 months of timely home payment history (prior mortgage payments and rent payments.) Mortgage can be verified by the bank, but rent to a private party can only be verified by cancelled checks.

"Word to your mother"
I can't believe I found a place it was appropriate to say that! ;~)

Cheers,
Dave Donhoff
Foolish Mortgage Broker
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