Pigg Advice Needed

[evolusd]

So we’ve conceded to being in San Diego another year as my job is going really well. We’ve been looking for a 3+ bedroom SFR to rent that has a yard for my two small children. The market for these types of properties seems limited with anything decent in areas we desire priced between $2,250 and $2,500/mo.

We found a nice home in San Carlos to rent for $2,400/mo. Yard could be bigger, but the home is very well kept and will suit our needs.

My concern is this – the current owners bought the home in 2006 for $525k and the home is now worth about $400k. There’s no mortgage record on the property profile, so I have no idea how they financed the purchase or what they owe. When we asked why they were leaving, they said they bought a new home in Sky Ranch in Santee (SkyRanchOwner will be happy).

How could they qualify for a new mortgage when they’re likely underwater on thier existing mortgage? Are lenders, especially builder lenders, considering rental income from the current home to cover the debt service on both homes? I thought those days were over. Could they have told the builder lender that they plan to walk away from the other home once the new one closes so all thier income could be used to cover the new mortgage only? Am I crazy for wondering this?

Property taxes are current, but I have no way of knowing if they’re planning on keeping the old home or strategically defaulting once they close on the new home, which could impact us as renters.

Any advice?

[PatentGuy]

Why do you assume they have any mortgage, let alone an underwater mortgage? It is possible they paid cash, or paid down/off an acquisition mortgage. I realize this was not the norm for 2006 acquisitions, but it did happen.

[PatentGuy]

Why do you assume they have any mortgage, let alone an underwater mortgage? It is possible they paid cash, or paid down/off an acquisition mortgage. I realize this was not the norm for 2006 acquisitions, but it did happen.

[PatentGuy]

Why do you assume they have any mortgage, let alone an underwater mortgage? It is possible they paid cash, or paid down/off an acquisition mortgage. I realize this was not the norm for 2006 acquisitions, but it did happen.

[PatentGuy]

Why do you assume they have any mortgage, let alone an underwater mortgage? It is possible they paid cash, or paid down/off an acquisition mortgage. I realize this was not the norm for 2006 acquisitions, but it did happen.

[PatentGuy]

Why do you assume they have any mortgage, let alone an underwater mortgage? It is possible they paid cash, or paid down/off an acquisition mortgage. I realize this was not the norm for 2006 acquisitions, but it did happen.

[evolusd]

Could happen, but that’s very unlikely barring an inheritance or trust fund. I don’t know anyone in their early 30s making enough cash flow to pay off a $400k+ (assumption) in four years. The more likely scenario is debt, so thats why I asked.

[evolusd]

Could happen, but that’s very unlikely barring an inheritance or trust fund. I don’t know anyone in their early 30s making enough cash flow to pay off a $400k+ (assumption) in four years. The more likely scenario is debt, so thats why I asked.

[evolusd]

Could happen, but that’s very unlikely barring an inheritance or trust fund. I don’t know anyone in their early 30s making enough cash flow to pay off a $400k+ (assumption) in four years. The more likely scenario is debt, so thats why I asked.

[evolusd]

Could happen, but that’s very unlikely barring an inheritance or trust fund. I don’t know anyone in their early 30s making enough cash flow to pay off a $400k+ (assumption) in four years. The more likely scenario is debt, so thats why I asked.

[evolusd]

Could happen, but that’s very unlikely barring an inheritance or trust fund. I don’t know anyone in their early 30s making enough cash flow to pay off a $400k+ (assumption) in four years. The more likely scenario is debt, so thats why I asked.

[XBoxBoy]

How long are you planning to stay there? Even if they stop paying the mortgage it will be a year at least before you would get booted out.

[XBoxBoy]

How long are you planning to stay there? Even if they stop paying the mortgage it will be a year at least before you would get booted out.

[XBoxBoy]

How long are you planning to stay there? Even if they stop paying the mortgage it will be a year at least before you would get booted out.

[XBoxBoy]

How long are you planning to stay there? Even if they stop paying the mortgage it will be a year at least before you would get booted out.

[Author]

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