No it isn't referring to the arrival of the Easter Bunny or a new song about Peter Cottontail, but an emerging trend that has resulted from a struggling mortgage economy.
House Hopping is defined as leaving your current residence and purchasing a new home with a lessor mortgage and then letting the bank foreclose on your former residence.
These trends, due to the current market climate, have lenders tightening the ropes and now requiring what seems like, excessive verification to prove this is not happening, as it is becoming more common.
Scenarios:
If selling current primary residence (owned) and buying a new home the guidelines now require the following
• Must provide MLS listing for current home
• Must provide good explanation for move
• Must qualify with both payments considered debts
If keeping current primary to lease and buying a new home:
• Must provide lease agreement with proof of deposit of first months rent (FHA). On Conventional it is to the Underwriter’s discretion.
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