I am in the same situation you are, I already own a home and want to buy another. Let me tell you how I am going to do it. As you might know, we have a small window of opportunity each year before tax time. For me, I knew I wanted my rental income to offset my mortgage, therefore making it easier to qualify rather than the Underwriter hitting me with both payments. With Conventional financing, the lender will be looking for a two year landlord history. Since I couldn't provide that, my next best loan program is either FHA, VA or USDA. With either one of these programs, as long I claim at least one month of rental income on the previous year's Federal Tax Returns, I can use the the rental income to offset my mortgage. Depending on the LTV of my current mortgage, the UTR has the discretion to use up to 95% of rent to cover my mortgage or as low 75%. Hope that helps you.
Best of Luck!
Yes you can do this but you will need 30% equity position in the departure residence,a signed lease agreement, and proof of deposit from your tenant.
NMLS # 75615/465546
Lenders are being very careful with whom they approve for a loan. You should look for a good lender, not a broker please, they are a headache to work with and not very trustworthy. There are many variables the lenders look at, like income, credit, debts, reserves, etc. Every case is different, but lending practices are more or less the same. Good luck!
As a rule of thumb a lender may want you to have at least 30% equity in the rental property before they can consider the rental income as income, therefore an appraisal will be required. If you donâ€™t have that equity your current income will have to cover the new mortgage and also any payments still existing on your current home. This can throw your debt to income ratio too high to qualify for a mortgage.
Realtor - Certified Negotiation Expert
Keller Williams Realty
of: (703) 679-1353
c: (301) 580-0670
Sales Associate, (SRES) Certified
950 Herndon Parkway
Herndon, VA 20170
I have a lender that would be more then happy to look at the entire picture and help make sure you have all of you "ducks in a row" prior to finding your next home. We help clients like you all of the time rent their current properties and help secure your new homes. Let us know how we can help!
Schatz Hayes Homes/KW
571 384 8752