Hi Melissa:
The straight forward answer is -- you need to maintain the proper debt ratio to be approved for the new loan. As a guideline, the total debt ratio a lender will look at is about 35%/41%. It varies and it is only a guideline. Basically, take your combined total minimal debt and divide it by your gross income. However, for rentals, you can only use 75% of your rental income to go against the mortgage debt.

Of course that is just the basics; you will need to show good credit, good job history, 6 months of assets.

This is really a very down and dirty answer to your question. I am both a lender and a Realtor and can help you if you need a more detailed answer. A loan application is the best way to start.

Give me a call or an email: 303.523.5534 Karin@allinonerealty.biz

I've been a landlord for 15 years and work with lots of investors. Here is my experience;

You are going to apply for this loan just like you would regardless if you have a rental or not. The rental will come into play but not by much. The underwriter will most definitely want a copy of lease and possibly proof of deposited rents. The lender is going to be looking at your income to debt ratio, credit score, down payment and employment. Just as they would any loan. As long as the rental is not detrimental to your finances you don't need to worry. And, unless the underwriter is suspicious of your ability as a landlord (just like any self employed person) or the legitimacy of the rental, be prepared to provided lots of documentation.

Good luck,
Susan Walker

Melissa,
It looks like you have already received some great advice. The best thing would be to talk to a professional local lender here in Colorado Springs. Each lender's rates and products can vary since they are competive I would recommend speaking to at least 2 or 3 to see who can give you the best rates and product that meets your specific needs. I have worked closely with several lenders here in town and would be happy to refer them to you. You can rest assured that they are reliable and will work with you in getting your needs met. They can prequalify you over the phone just to get you started. Once you have idenitified a home they can give you a good faith estimate on what your cost will be. Please give me a call and I will be happy to help you with the process of buying your second home. As a buyers agent my services to buyers are free. The sellers pay me to sell their homes. I look forward to hearing from you.
Pamela Weatherford
HOPE Realty LLC
719.661.8672 http://www.AllAboutColoradoSpringsRealEstate.com

Good question. Depending on your credit (a 720 or higher score is the magic number) you’re looking at probably wanting to put 5-10% down to solidify a conventional loan. Sometimes you can get away with putting down less but these figures should get you qualified more easily. I am a specialist in real estate sales and my company also focuses on property management as well. If you need help or have further questions call me any time. Located at 3604 Galley Road.

It sounds like you have made a step in the right direction. I would reccomend a local lender in the Colorado Springs area to get things going for a loan approval. A copy of an executed lease should be acceptable for their needs. As a buyer specialist in the Colorado Springs area, I would be happy to counsel you through the buying process including the loan. Contact me at your convenience to schedule a buyer consultation. My office is located at 5590 N Academy Blvd.

Best regards,

Alan Daniels
The Daniels Team - RE/MAX Advantage
alandaniels@remax.net

Hi Melissa,

As a mortgage broker I've dealt with this situation many times and if you make enough money and have decent credit, you won't be restricted on LTV or even be required to provide a lease for your current property. Give me a call and I'll be happy to assess your situation and let you know if you qualify for the home that you're looking to buy -- 720.280.0441.

Lenders will be looking to make sure the move make sense, and that the new home is truly going to be owner occupied. They will do this by comparing the two homes, ideally you're moving up into a newer, more expensive, or bigger home. If you are downsizing, they will want an explanation as to why.

If you don't make enough money, and need the lease income to qualify, the rules change a bit. Lower LTVs and higher rates will most likely come into play.

I'd be happy to help you with your situation, and answer any of your questions. Feel free to call me today at 720.280.0441 or e-mail ben@bythebrookemortgage.com

Take care,

Ben Edgson
Mortgage Broker
By the Brooke Mortgage
ben@bythebrookemortgage.com

Most banks will require a lease from the tenants of your existing property. They also may require a larger down payment on the second home you intend to purchase because it is in fact a 2nd home. In the current mortgage market it is a little more difficult to purchase multiple properties but the best advice you can get at this point would be to talk to 2-3 mortgage officers and see where youcan get the best deal.

I have a great lender who can help you. Send me an email or a phone call. Jason Burch at Homestead Real Estate. 720-352-9038 or jasonb@boulderhomestead.com