Home Buying in 19317>Question Details

Dmtrain, Other/Just Looking in 19317

I am planning on moving to NY come next summer. I currently own a property and would like to rent that out

Asked by Dmtrain, 19317 Tue Sep 1, 2009

and get another mortgage for the home in NY. What are the implications of doing this? Also, do I need to have proof of a renter in order to get the second mortgage?

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Hi, This will depend on your financial situtaion. Your debt to income ratio will be a big deciding factor. I will tell you, In NY, it always helsp to have a renter in place becasue the rent can be considered income. I actually have a deal like this right now. The buyer is purchasing a two family home and already has a tenant signed up so it is helping him with the loan.

Christopher Pagli
Licensed Associate Broker
Accredited Buyer Representative
GREEN Designated Agent
William Raveis Legends Realty Group
0 votes Thank Flag Link Fri Jul 15, 2011
If you cannot qualify for the two mortgages without rental income, then you will need to meed a few criteria for the bank to let you use the rental income for qualification. First, you will need to have a decent amount of equity in the home you are renting. I can't remember exactly, but it is at least 25% if not more. This is because banks don't want to see you buy a second home then stop paying on your first home. Second, you will need to remember that most banks will only count 75% of the potential rental income towards qualifying.

As others have mentioned, you will need to contact your lender if you move out of the house. This is actually a clause in your mortgage agreement, not just a nice thing to do.
0 votes Thank Flag Link Fri Jul 15, 2011
The rental market in the philadelphia suburbs is extremely strong right now. As long as you are priced right, you should be able to rent in less than 30 days. I have been servicing 25 single family home and cond rentals in the area for the last 20 years and this is the strongest rental market Ive ever seen. I dont need to tell you why.

It will ultimately be up to the bank, but in my experience proof of the executed lease and financial standing of your tenant, along with a current appraisal on the property to compare to your existing loan to make sure you have equity should be enough to appease them for the new loan.

I'm always available to help if you need my assitance.

Brian Harlan
0 votes Thank Flag Link Fri Jul 15, 2011

It might be a good idea for you to contact your current mortgage provider and explain to them that you might be using it in the future as an investment property. The interest rate on the current loan may rise by 1 point because of the change, but then you should be able to legally begin utilizing that as a tax deduction for depreciation. I would discuss these options with a tax accountant as well as the current mortgage provider. Depending on what you owe on the current property, it might be better for you to refinance with a bank that does investment loans. I don't like to really go too far into the finance world with my information, so you should discuss your options for that with loan officers. I hope this information is useful to you.

Thank You,
Brian Fletcher
0 votes Thank Flag Link Thu Sep 3, 2009
Do I need to do anything with the mortgage on my current property if/when I choose to rent it out?
0 votes Thank Flag Link Wed Sep 2, 2009
Hi: Congratulations on your plans to move to NY. If you qualify for 2 mortgages you will be OK. I suspect however, that you will need to have the current home rented and will have to have a rental agreement in your hands and approved by the underwriter before you can settle on your new home. In this financial climate this may not be as easy as it was in the past.

I'm wondering why you do not sell the current property? You may want to reassess the market sometime in the New Year and plan to sell in the Spring with a settlement in summer at your convenience. It also depends on the property you have, it should be fairly easy if the home would suit a first time buyer - we are anticipating a further first time buyer tax credit next year which should help too.

If you rent the home try to get as long a lease as you can and be sure to check the applicants credit etc. Being a long distance landlord can be tiresome and using a management company is costly.

Let me know if I can help when the time comes I'll be happy to give you an idea of the market conditions and price you can expect to sell for. I can also list the property for rent.

Best Wishes for your future plans.


Rosemary Hall
Weichert, Realtors - Chadds Ford Office
Cel: 215 901-6912
Web Reference: http://www.roshomes.com
0 votes Thank Flag Link Wed Sep 2, 2009

If you have a renter before you move it will be much easier to get a mortgage on the primary home in NY. If you can qualify to carry both loans you will also not have any problems getting the mortgage in NY. I do suggest that you look into the possibilities of renting your current home before you look in the new area, and consult a loan officer that can run your credit and preapprove you for the loan that you would need. When it comes time if you need any further assistance keep my information handy. I can help you rent your property and I can manage the property for you so you won't have to deal with it from NY.

Thank You,
Brian Fletcher
Lincoln Realty
0 votes Thank Flag Link Wed Sep 2, 2009
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