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Joe Scherer's Blog

By Joseph Scherer | Agent in Dakota County, MN

Renting Out Your Savage Home To Buy Another

Renting Out Your Savage Home To Buy Another
Many Savage home sellers are faced with the problem of owing more on their home loans than what their property is worth in today's market. The fact is that in order for you to sell your house in the MN real estate market you need to be able to pay off your entire mortgage loan in order to sell it. Unless you want to arrange a short sale with your mortgage lender, this means you will bring money to the closing table to pay off the remaining balance owed. As a result many home sellers in Savage who want to move are considering the possibility of making their current home available to rent with the hope of buying a new house.

The good news today is that with the tougher housing market, rents have gone up significantly. Renters find that they are competing with each other to rent out a Savage home as their is a shortage of quality rentals available today. Many home sellers in this position are finding that they can more than cover the expenses for retaining the home with these increased rents.

The goal, of course, is to rent out the current home long enough to allow the Minnesota real estate market to recover in terms of values. Hopefully within a few years the value of your rental home will rise sufficiently to sell it for enough to pay off the mortgage. The key to accomplishing this is to see if you will qualify for a new mortgage if you have rented out your current home.

Lenders have specific guidelines for those Savage sellers who will rent out their home to buy another. Depending on the equity that you have in your home, a mortgage lender may or may not consider the rental income you receive when they qualify you for the new mortgage. The only way to know this is to call a lender to get preapproved.

Get preapproved before listing your home for sale

Once we meet to discuss the value of your old home it is critical that you go through the process of getting preapproved for a mortgage loan. Your mortgage broker can help you decide which of the options are best whether selling or renting out your current home. The process of preapproval is is usually free and contains no loan obligation. A good lender will be able to examine all of the options available to you such as MN FHA loans, Conventional, VA, or other types of mortgage loans.

Developing now into a bedroom community to Minneapolis and Saint Paul, Savage has approximately tripled in size over the past two decades. Filled with affordable homes for sale, Savage, MN has become a favorite spot to look for real estate deals for the MN first time home buyer. Conveniently located just southwest of Bloomington, living in Savage means you will have a 20-30 minute commute to some of the largest employers in Minneapolis. Since the community has a busy Park and Rec program, it seems like homeowners of Savage always have something fun to do. If you're thinking of buying real estate in Minnesota, please call me and I'm glad to help!

If you would like to discuss the reality of renting out your current home, please email me for more information.

Joe Scherer
Sales Executive, Licensed Realtor in Minnesota 
Century 21 Premier Group 
Cell 612-991-6365 
1660 S. Highway 100, Suite #578
Parkdale Plaza
St. Louis Park, MN  55416
With a focus on Twin Cities real estate and surrounding communities.

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