I'm looking at buying a new house, but I want to keep my current home as rental property. How much more difficult will it be to get a loan?

Asked by Joe, 27612 Fri Nov 30, 2012

Value of current home: ~235k Owe: ~213k
New home listed @ 325k and plan on putting down 5%
~780 Credit score for my wife and I. ~150 annual income. ~950 in debt repayments each month (student loan, cars, small CC balance.

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Irina Bennett, Agent, Chapel Hill, NC
Tue Dec 4, 2012
Should be pretty straightforward… I would recommend getting a pre-approval to be for sure w/ a quality lender in person.
And here is the one for you to call on:
Amy Bonis
The AmyBonisMortgageTeam
Simply the best in home lending! http://www.amybonis.com (919) 414- 4430
0 votes
Monica Mendez, Agent, Zebulon, NC
Sun Dec 2, 2012
You can do it; and I know some lenders who specializes in this kind of loans.
If you need assistance please contact me and I will be more than happy to refer you to them!
If you can buy now without selling your current home is great because right now is a buyers market!
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Mary LaFon, Agent, Cary, NC
Fri Nov 30, 2012
I don't belive that you need two years of experience in this area to be a landlord. I can help you find one or you may just want to call or bank or whatever lender you choose to use and run the numbers. If you're qualified, you're in. People are renting like crazy so it won't be hard to keep the home occupied. Also, a Realtor can either personally manage or find a management group to deal with your property, which is normally a 10% fee from the monthly rent. Just remember you will need an agent to let you know how to price your home correctly to rent, and to get you into another home. :)
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Mimi Francis, Agent, Cary, NC
Fri Nov 30, 2012
i am assisting 2 buyers do just that right now. According to the lender we're using, It is not necessary to have 2 years of experience as a landlord - at least not in the Raleigh NC area. The lender's decision is based upon debt and income ratios and credit worthiness of the buyers. Give me a call if you'd like to speak further - it's an *awesome time* for trading up your home!
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My NC Homes…, Agent, Chapel Hill, NC
Fri Nov 30, 2012
Great question for a lender. Need to know your current mortgage payment.
Running some rough numbers it looks like you're looking at approximately $1500+/- for the new mortgage payment plus some PMI as I believe you'll be having to do an FHA loan.so total of roughly $2500 in payments before considering your existing home.

I can tell you that unless you have two years of documented experience as a landlord then even with a signed lease on your existing home a lender won't be able to count the rent as an offset against your house payment so you're going to have to be able to show on paper that you and your wife can afford the entire debt regardless of the rent you'll be. I have a feel you'll be pushing the envelope on the debt to income ratio.

I would suggest giving a call to Todd Barbour at River Community Bank -919-459-1311 He could give you a hard defined answer easily and if you're going to be looking for a mortgage you could do a lot worse.

Best of Luck to you.
0 votes
Where do you get $2500 in payments for the new home? Why PMI if I'm putting down 5%?
Flag Fri Nov 30, 2012
Skye Creech, Agent, Apex, NC
Fri Nov 30, 2012
I as well am looking to do the exact same thing in the coming months. I have been doing much research as I don't want to let me current home go. Putting 20% down would be best and I doubt the bank would deny you a loan. Or I would try to get the mortgage balance of your home now to $193,000 and still come with a down payment of 5%. Overall I would speak to your bank or lender, as they will know better than any agent.
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