Both answers below are good. It is really a matter of how the numbers will play out. In short, yes it is possible. Escrow reserves can be variable, as high as 6 months depending on risk. More than likely a signed lease will be required. Yes, the mortgage payment will be accounted for in your debt to income ratio.
Feel free to call me or email me with any additional questions you may have.
Prudential PenFed Realty
You can do 5% all day long. Just closed one yesterday. 3% is possible but the payment is much higher and there are less banks that will lend on that scenario.
Cash reserves are determined by Fannie Mae. The loan needs to be run thru DU which is Fannie's automated UW system. Please note that lenders may have additional restrictions over what Fannie allows. These are called overlays in the business. I would plan on at least 2 months reserves for the new home and 6 months on the now investment home. Yesterday I saw a bank that required 6 months on each home which is what I was talking about in regards to overlays. Also unless you have 30% equity in the property rent will not be allowed to cover the mortgage payment. So you would have to qualify with both mortgage payments. Hope this helps please let me know if you need more.
Senior Loan Officer
600 Jefferson Plaza, Suite 400
Rockville, MD 20852
You actually purchase a loan using conventional financing with as little as 5 % down. Your current mortgage would could against you in qualifying but you would be able to offest if you have enough equity in the home and could document you have a renter lined up.
Let me know if you have any questions
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