Home Buying in Warwick>Question Details

Jessica.B.Me…, Home Buyer in 07462

Do we need "Landlord Experience" to qualify for a mortgage.?

Asked by Jessica.B.Mentone, 07462 Thu Jan 10, 2013

My husband and I own a small condo (in Sussex County NJ) and would like to rent it out to purchase a house (which would become our primary residence). We have been told by quite a few banks that we would need to have two years of "Landlord Experience" of we intend to factor that into the mortgage approval for the new home. Is this a requirement for all banks? We are looking into a conventional 30 year mortgage with 20% down.

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Great question! First I am not a mortgage lender/broker etc.

As a Realtor I have knowledge of your question. Lender underwriting criteria is constantly changing. In short I believe you can find a lender who will look at "landlord" experience differently than a two year waiting period.

An example would be if you have at least 25% equity in your current home. If so and you can provide lender with a copy of a lease and a security deposit from tenant and can naturally meet credit/income/debt criteria, you can qualify for a mortgage without being a land lord for two years.

If you like I can put you in touch with a mortgage broker who can help you.
0 votes Thank Flag Link Thu Jan 10, 2013
Thank you so much for your answer. I would like very much if you could provide the name of a mortgage broker.
Flag Fri Jan 11, 2013
Jessica, at this moment, it may be more advantageous for you to purchase the second home as just that - a second home. You will (hopefully) qualify for standard mortgage rates, rather than at "investment" financing rates, which look for more money down and have a higher interest rate than the straightforward residential rate.

Further, in order to have real estate qualify as an investment property, it must be shown on a tax return as such. (Enacted in 2011). This is where the banks will look to qualify income as supporting your financial picture. So that will mean that at least a year will need to pass. Also, remember, only the "net" will help you here.

Answers are, of course, not just this simple. You may be missing another opportunity all together. I am licensed in both New Jersey and in New York. Feel free to contact me if you want to discuss this, or any other future investments, whether in New Jersey or in New York, whether residential or investment/multifamily/mixed use commercial, or the like, in greater detail.
0 votes Thank Flag Link Thu Jan 10, 2013
The Lenders usually require 2 years experience and records for the Rental to qualify as INCOME:
The is experience for you and a track record for the condo.
0 votes Thank Flag Link Thu Jan 10, 2013
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