FHA 3.5% down. I am in need to relocate for my employer. Since I cannot sell my home (its upside down) I
wanted to rent it out and buy something new in the new location.... but the fha lender said I could only qualify based on my salary and although he did get me qualified for 2 mortgages, the new location loan limit is pretty low, and I don't think I can find anything in that range. Is there any other options? He states my only option is to pay off a couple credit cards which will raise my loan limit but again its still only county my salary NOT counting any of the new rental income.
Unless you have equity in the property you are renting out (I think about 30%) they will not count the rental income due to recent changes to prevent "Buy and Bail" situations. Previously, many people would set up a sham renter for the underwater property, then go buy another similar house for a lot less using the "rent" to help them qualify for the extra mortgage. Once they had settled on the new home and moved in, they simply stopped paying the mortgage on the old home and let it go into foreclosure.
Unfortunately, the sins of the past buyers are now woven into todays guidelines and I don't know of any lender that will give you credit for the rental income.
Sorry to be the bearer of bad news.
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