A NEW INCOME

A New Income Q&A

Q: Want to buy a new home but have questions first.?

My wife and I would like to move soon. We currently own our home now ($130K). My wife is not working, she's in nursing school and will graduate in June 2010. I am not working due to an accident in July 2005 but I do receive $5000 a month in a structured settlement payment that is due to pay me until 2029. We have $70K to put down and we're looking at homes that are asking around $245-299K. Basically want to get out of town and more rural with some land. We dont have the best credit (wifes is better than mine) but we dont owe anything aside from my wifes student loans ($25K) that are due to be paid back in December 2010 - that is when she's due to start making payments. All credit cards (she has 3) are paid off and they're nothing huge all under 1K in balance. We were wondering if we used the 70K as down payment and put our current home up as collateral (then rent it out for around $800 monthly) we could possibly get the loan for the new house or would having the $5000 a month in income be enough even though it's not "income" perse it's a settlement? This is all kind of new to us so we dont know where to start or what to do but dont want to be taken advantage of either. Thanks if you read and understand all that!

A: you cannot put a house up "for collateral". You can borrow up to 80% of it;s value, but that makes no sense if you intend to buy another house not house how a bank will look at your income if it's guaranteed for teh next 20 yrs, I don;t see why they wouldn't count it

A New Income Q&A A New Income