First time rental home buyer..questions

[Jaime]

Ok, so I am planning on buying a rental home in Florida. My husband purchased our home in 2003, my name is not on the mortgage. Would I qualify as a first time home buyer?
Second question...I have been opening tons of credit cards over the last few years-just for the points, no balances, will that matter to a lender if my credit score is excellent? Should I start closing some down? I don't plan on applying for a mortgage until about August of this year.
Finally, do any of you have rentals in Florida, and how is the market there? I plan on researching a lot before I jump into this, these are just some questions to get my mind rolling. Thanks for your help

 

[Vinay]

Great question....I am also looking to buy our first home soon and interested in knowing about closing down credit cards. Would love to hear from experts.

 

[Ryan-o]

Ok, so I am planning on buying a rental home in Florida. My husband purchased our home in 2003, my name is not on the mortgage. Would I qualify as a first time home buyer?
Second question...I have been opening tons of credit cards over the last few years-just for the points, no balances, will that matter to a lender if my credit score is excellent? Should I start closing some down? I don't plan on applying for a mortgage until about August of this year.
Finally, do any of you have rentals in Florida, and how is the market there? I plan on researching a lot before I jump into this, these are just some questions to get my mind rolling. Thanks for your help

How many credit card accounts do you currently have open? Closing accounts could lower your average age of accounts, thereby decreasing your credit score (depends on how long they have been open). From my understanding, as long as you have a credit score over 750 or so, you will be getting the lowest offered interest rate. Having a higher credit score provides nominal benefit. Where in Florida are you looking?... not sure about the first time home buyer credit.

 

[Jaime]

My credit score is about 760, and I have around 35 accounts open. Most have been opened within the last two and a half years. I want to find something around the Gulf side, maybe Treasure Island area. Thanks for the replies so far

 

[Matt]

How many credit card accounts do you currently have open? Closing accounts could lower your average age of accounts, thereby decreasing your credit score (depends on how long they have been open).

From what I can gather, closed accounts stay on your report for several years, but in any case, with @Jaime having a timeframe of just 2.5yrs on them all it wouldn't matter.

Personally, I might consolidate by transferring the credit lines over to the cards within each family (Chase, Citi, etc) that have a zero fee, so you have fewer accounts but the same available credit.

Would I qualify as a first time home buyer?

For what purpose? That you are buying an investment property may also have an impact on if you are considered a first time home buyer also.

 

[Hanaleiradio]

All mortgages targeting first time homebuyers require that the owner occupies the property being bought. Same is true for any programs that provide closing cost or DP assistance. Before the crash, when home price values were marching steadily upward, some small fry investors would line up relatives who were not on another mortgage to be the buyer of record in order to qualify for low DP 1st time homebuyer mortgages and subsidies. After a few months they would then flip the property. To do that now, one has to explicitly commit fraud on a couple of the closing documents.

With an investment property, a minimum DP of 25-30% is the norm. 35 cc accounts opened within the last 2.5 years will definitely impact your ability to secure financing. (As noted earlier, hard pulls continue to show up on your credit report for 2 years. ) To have any chance, you're likely need to have a larger DP, with 6 months cash reserves set aside, and a low DTI. (If you were a first time homebuyer seeking a mortgage with low DP and standard 30/36 LTVs, then that many hard pulls would be hard to overcome.) Consolidating CC accounts in a way that preserves the CLs will definitely help, but you need as much time as possible between the consolidation and the mortgage app--ideally 2 years, with 6 months often the minimum for it to benefit. In the post-crash world of mortgage lending, every app gets combed over by human eyes, and everything is questioned.

Treasure Island rental market is very strong, with increased demand and a continued shortage of supply. Its been that way for years, and even more so since the crash. Still a fair number of homes are underwater. More houses for sale than buyers. You're 3 years too late for the easy pickings with cash, but with cash you can still do well.

 

[redbirdsj]

As stated above, first time home buyer programs are typically only for owner occupants. I would not worry too much about your inquiries - my wife and I have had a similar amount open over the past two years and lenders don't seem to care other than wanting an explanation (we've procured several investment mortgages in the past year). Inquiries in the past six months usually require an explanation. Lenders will care much more about your fundamentals - DTI, adequate reserves (doesn't have to be cash - can be retirement or brokerage accounts), and 75% LTV.