Sometimes a home used as a rental property can be a detriment, even though it is earning cash flow for you. Lenders underwrite rental property like this: take the monthly gross rental income and multiple it by 75%, then deduct the monthly mortgage payment, real estate taxes, property insurance premium, home owner dues (if any), and mortgage insurance (if any). The final number is what the lender will use as your rental income. A positive number will count toward your debt to income ratio and a negative number will be a detriment. It's the 25% the lenders take off the top of the gross rental income that may cause a problem for a borrower. They do this to cover possible vacancies, maintenance and repairs, utilities you may pay, etc.
Sounds like you have all your ducks in order. Congratulations. If you need assistance purchasing a home and obtaining a mortgage for your San Francisco home, call me.
Your new home can qualify as owner occupied as long as you occupy it and can show that your position is based in SF.
I noticed you mentioned that you have a separate home in LA paid off as an asset. It leads me to beleive that you rent it out and may have experience as a landlord. Depending on income and other circumstances, it seems that you would be a great candidate to purchase.
I would love to sit down with you and discuss your options.
Home Mortgage Consultant
Land Home Financial
Yes, this can get tricky but if you are renting a property out then you would not be able to secure an owner-occupied loan. Have you talked to your mortgage broker about this?
I'm happy to help where I can so feel free to give me a call: 415.305.4911 cell.
Thanks and welcome to SF!
Rich Bennett, Realtor in SF since 2002
Zephyr Real Estate
The other way around this, is to have sufficient equity (appx. 25%) in your LA property. I don't know what you bought the home for, what it's worth, and what you have paid the loan down to......to determine if this is the case.
I would call around and get some opinions from mortgage professionals about what the best course of action is for your situation. Most reputable ones should be able to tell you right away if this is going to be feasible or not, and also explain to you all your options.