What percentage of rent from rental properties (non owner occ) is used when applying for a new loan?

Asked by Pinnacle Mountain, New Britain, CT Thu Jun 9, 2011

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Robin Silver…, Mortgage Broker Or Lender, Garden City, NY
Thu Jun 9, 2011
Pinnacle, you will have to explain the situation a little more, but you are getting partially correct answers.
The amount of rental income used is 75%. As far as wether you can use the rental income, it will depend on whether you have showed income on past tax returns, or if you expect to turn a primary residence into a rental property when you buy a new primary residence. If you are buying a new multi-family, you would use 75% of the projected rent according to the appraisal. Banks are all requiring different amount of reserves, but most of them are 6 months on the investment property plus 2 months on a primary.
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Seth Winklem…, Agent, Bristol, CT
Thu Jun 9, 2011
Clark is mostly correct! But you need two years of rental history with the 75% if you are going conventional. for FHA 75% regardless of past landlord history, plus if 3-4 family, buyer must have 3 months reserves left after the closing costs and down payment.
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Clark Riel, Agent, Reno, NV
Thu Jun 9, 2011
If you have rental properties already that are generating income I believe conventional lenders will use 75% of the rents as income to off set your debt. But, I would give your bank a call and make sure that is correct, because it seems that loan standards are changing daily.
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Seth Winklem…, Agent, Bristol, CT
Thu Jun 9, 2011
The question will be whether you have been a landlord before. If you have been claiming rent on your taxes then that is your income.
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