are you looking at buying a true " second" home ( aka vacation home )..or are you planning to move from present home , rent it and then purchase a new home to live in as a primary residence ?
or have you already moved out of your primary residence , rented it and are now looking for a new place to buy to move into ?
I think your question also might be what is the formula for a lender to approve a loan for you. Well your lender will not consider your rental income you "will" receive on the property because that is all theory, until it is rented. Then they wont even consider it as income until you have it rented for 24 months or more, at which point they take 75% of the rent an consider it income. The formula the lender will use is can you carry both mortgages without it being rented out? If not, you are not likely to get a second home. Best of luck to you in your real estate endeavors.
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The current home that is turned into a rental property must have at least 30% equity in it to be able to count the rents as income. If it does, then the buyer is able to count 75% of the rental income. If there is not 30% equity then they cannot count the rents and have to qualify for the whole payment and the new payment with just their income from their job.
Good credit and assets, sizable down payment really plays into how much of a debt to income ratio a person can get approved with. The normal is 45% or gross income minus all debts on credit Auto loans/credit cards), mortgage payment including (piti) and the old mortgage if applicable.
If someone made 5000.00 a month he would be able to use (45%)$2250.00 for all monthly payments listed above.
Some times with strong assets and credit scores they can go to 50% debt to income.
Hope this helps!
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For your specifics, you'll need to talk to a local lender who can look at your overall financial situation. In general, a lender may consider up to 75% of your rent as income when calculating your debt ratio, provided you have a signed lease agreement and can document a history of rent coming into your account.
If you add this income to your other income, a lender may allow 45% of your gross income to go toward a new mortgage. There are exceptions to this, depending on your overall situation and the loan program.