Home Buying in Baltimore>Question Details

Ms B, Home Buyer in Baltimore, MD

Can I rent out my house and be able to buy a new house?

Asked by Ms B, Baltimore, MD Sat Jan 15, 2011

The housing market is slow and I want to rent out my house and buy a new house. Will I be able to do this and get approved for a new house loan? My current mortgage is 786 and I make 75,000 a year with about 20,000 debt. The house I want to purchase is 229,000?

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For an accurate answer, do visit with any qualified loan officer(s), after reviewing your overall financial information, a determination on qualification can be made--if for some reason you don't yet qualify, your loan officer may offer great suggestions as to what needs to be done in order to qualify in the very near future...
1 vote Thank Flag Link Sat Jan 15, 2011
I love how folks say you "MUST" do this... or you "NEED" to do that. hahaha always interesting to see someone's diction, especially considering being in an industry that requires some level of customer service.

Yes. You can... and just about any lender can do it. Depends on the loan type you qualify for (Conv, FHA, VA), but you will be able to.

Plenty of caveats to this answer, but by and large, go for it! ;)

Web Reference: http://www.203kworld.com
0 votes Thank Flag Link Mon Feb 28, 2011
You can 100% rent out your house and be able to buy a new home, but you need to fill out and application on my website and i will be able to give you exact details on what you will need for a smooth transaction.

Happy House Hunting!!!

Gene Drubetskoy
Home Mortgage Consultant
Wells Fargo Home Mortgage
410,526.1915 Office
Web Reference: http://www.GeneDru.com
0 votes Thank Flag Link Sun Jan 16, 2011
Can you do this? Yes, but it will depend on your credit and financial background. This is something a loan officer can give you more advice in regards. I have had clients that have been approved for this same situation. You just need to be aware that if something happens with the renters and you don't have renters paying rent you are still responsible for the mortgage on your rental property, so in other words always paying two mortgages that can put a larger stress on your financial means (loss of job, illness, etc). Bottom line depending on your financial side of your life, and finding a loan officer that will approve the mortgage you can do this.
0 votes Thank Flag Link Sun Jan 16, 2011
It all depends on your credit scores and income to debt ratios. If you are married or have a significant other that will be on the deed of the home you want to buy, that may help you as well.

I just completed a transaction for a young couple that are expecting their first child and decided to leave the small condo they lived in. I found them a home, they combined their income - so even with the debt of the condo, they still qualified for a home loan and purchased a very nice home in Columbia, MD. They in turn, had set aside enough money to carry them for a few months on the cond,o just in case it did not rent fast. But they fixed it up and cleaned it up and had it ready to put on the market for rental about 1.5 months after buying - I put it up for rent and had it rented in less than 2 weeks!

Your first step should be to contact a home loan advisor, just to see if this would be possible for you. If you need to contact anyone, I do have a few in mind I can refer you to.

Best of luck to you!
0 votes Thank Flag Link Sun Jan 16, 2011
I agree that you will need to provide a more complete financial picture before that question is answered fully. Many factors come into play: how much are you putting down to purchase the $229,000 home and from where are you getting it? Can you pay off the $20,000 of debt; what type of debt is it? Your credit score? Do you have enough reserves for the new home purchase for PITI? etc.

I have done this with several of my clients recently and find that lenders proceed with more caution. In today's market, they are likely to require your debt-to-income ratio to be more favorable and have a signed tenant lease in place before funding a loan.

Your best bet is to talk with your lender about your plans. And to have a savvy agent on your side to guide you through a tenant lease and new purchase.

If I can offer you some contacts, please feel free to ring me!

Kimberly Barton, REALTOR
Champion Realty, Inc.
711 Bestgate Road
Annapolis, MD 21401
410.224.0600 Office
410.224.0645 Direct
0 votes Thank Flag Link Sat Jan 15, 2011
You have not given nearly enough information here. We don't know if your current mortgage includes taxes and insurance, if you have any homeowner's dues, how much you plan to put down on the $229,000 purchase, what the taxes are, homeowner's insurance, PMI if you can't put down 20%. The amount of debt you have is irrelevant, the amount of your minimum monthly payments is. The bottom line is, it's possible, depending on all these variables. It would be best to have a competent, knowledgeable loan officer help you out with this, rather than rely on responses from realtors.
0 votes Thank Flag Link Sat Jan 15, 2011
You've received good answers, however you need to meet with a realtor and a lender to discuss market, financing and the future issues when you do sell. I invite you to give me all and we can talk. Mary 410-353-1496
0 votes Thank Flag Link Sat Jan 15, 2011
Ms B, that depends. Your best bet is to to speak with a mortgage professional. The debt may be too high, but I am not certain. I have a few that could advise you better, please just send me a message if you would like to speak with them.
You are smart to look at the opportunities out there!
Marney Kirk
Keller Williams Excellence Realty
0 votes Thank Flag Link Sat Jan 15, 2011
Hi Ms. B,

The answer is maybe! Will the rent cover your complete mortgage payment? Check with a local realtor who specializes in rentals and request a free CMA. Then contact a good local lender to find out the best loan type for you and your situation.
0 votes Thank Flag Link Sat Jan 15, 2011
I am currently working with a client that just did that same thing. I would recommend getting preapproved with a qualified lender of course stating your intention of renting out what is now your principal residence. You should also know that they will not be able to consider the rental income as a source for your funding of a new residence unless its been rented for at least 6months. I work with several clients in the Baltimore area if you would like assistance or just have more questions, I will be glad to help in anyway that I can. Thanks Madi
0 votes Thank Flag Link Sat Jan 15, 2011
You need to talk to a good loan officer who has experience dealing with scenarios like this. I would be happy to provide you with a list of loan officers that I have worked with who have experience working with investors. I am a residential investment specialist and work with a lot of people who use the equity in their current home to purchase investment property and who rent out their previous principle residence and use the equity to purchase another property.
0 votes Thank Flag Link Sat Jan 15, 2011
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