Home Buying in Charlotte>Question Details

Jignesh, Home Buyer in San Antonio, TX

Using Rental Income with short rental history for mortgage qualification

Asked by Jignesh, San Antonio, TX Tue Nov 5, 2013

I exploring my option for buying house in Charlotte NC. I have couple of rental properties in Texas. My DTI is high with out using Rental income. I have only 4 month of rental history. I have 40% equity in my first house. Can renal income with short rental history be used for qualification of mortgage?

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My NC Homes Team’s answer
Not with traditional lenders. You must have 2 years of documented rental history in order to use rental income to qualify for a mortgage. There may be some hard money lenders who might consider it but then you'll be paying a higher interest rate.
0 votes Thank Flag Link Wed Nov 6, 2013

I think the answer depends on the lender but in general here is how I understand the requirements from my own personal experience with my two rental properties.

To count the income from a rental you either need to have a two year rental history OR if you have minimum amount of equity (I believe it is 25%+ but a lender would need to verify) then you can count up to 75% of the monthly rent.

Most lenders are also going to want you to show that you have atleast 6 months of reserves (monthly payments and HOA dues) for all of your properties in reserves in addition to your down payment.

Again this is just what I remember from my own personal purchase experience last year. Requirements may have changed since my purchase and may certainly vary depending on loan type and lender.

If you need better more exact answers, I would be happy to put you in touch with the lender I use.

Amy Baker
Allen Tate Realtors
0 votes Thank Flag Link Tue Nov 5, 2013
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