Financing in 95814>Question Details

Melberlime, Home Buyer in Sacramento, CA

Is it possible to claim rent on a previously owner-occupied home as income when applying for a new mortgage?

Asked by Melberlime, Sacramento, CA Thu Apr 16, 2009

I heard the owner would need at least 25% equity to do so, but that there may be an exeption when moving for work.

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Melberlime,

Depending on the new loan you seek, you may be subject to needing a 30% equity position in the previous owner-occupied property if you would like to have its forthcoming rental income offset its mortgage payment. And keep in mind that the new lender will typically use 75% of the gross incoming rent for qualifying purposes.

So, by way of example, if you are vacating a home worth $300K, and you have a loan on it no greater than $210K, and you expect to get rent per month of $2000, the bank may permit you to use $1500 towards your qualifying debt ratios on the new loan.

If you have any further questions, please feel free to get in touch.

Best regards,

Rob Spinosa
rspinosa@mortgagemasterinc.com
0 votes Thank Flag Link Thu Apr 16, 2009
If your new loan is an FHA loan, you can use rental income IF you are moving for work... You need a signed lease agreement with at least 1 year left on it AFTER you close your loan, and you need evidence that the seecurity deposit was received and deposited.
0 votes Thank Flag Link Thu Apr 16, 2009
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