Using existing rental income to qualify for an investment mortgage??!!

Asked by William Grant, Fayetteville, NC Thu Feb 14, 2013

Okay I've heard and read several different and contradictory explanations on how and if rental income can be used in qualifying for a mortgage for an investment property. The two main explanations I've heard are A) 75% can be used if existing leases are in place and have at least 12 months left before expiration B) No rental income can be used you have to qualify solely on personal income. I can give a hypothetical to base answers off of: If I have two years experience as a landlord and want to buy a triplex (my first venture outside of the single family/condo territory) priced at 130,000, the monthly revenue as its rented before purchase is $1500, and I put 25% down, how much more income do I need to show to qualify? Will current rents count or not? The property is located in Fayetteville, NC and will NOT be owner occupied. Thanks in advance because I would love to clarify this issue.

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Paul Perry, Agent, Fayetteville, NC
Mon Feb 18, 2013
Mr. Grant,

Speaking with a qualified lender is your best option for fianancial obligations, for helping finding property you're interested in, I'm more than willing to assist. I wish I could give more advice, but I'd be speaking outside my lane.
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James Furlong, Agent, Brookline, MA
Fri Feb 15, 2013
Your best bet is to speak directly with a mortgage expert that works with commercial/investor loans. There are a variety of lenders and loans available so shop around.
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Julissa Jump…, Agent, Fayetteville, NC
Thu Feb 14, 2013
Hi William: I am a real estate broker, not a mortgage expert.

I asked one of the lenders we use, Jason Brooks, and this is the information he provided. You may be able to use the income from the current leases on the investment property if you have 2 years rental property management experience. That income may be counted at 75% ( the 25% is factored as maintenance, etc) and then the mortgage deducted from that. So, for instance, if the property had $1000 in lease income, you may be able to count $750 of that, minus a mortgage payment (say $500, as an example) means $250 may count as income.

He also said that if you have less than 2 years, you may not be able to count the income, but they don't count the mortgage against you either, and you qualify on your personal income.

He said they can do 80% LTV on their investment loans.

You may want to contact Jason Brooks at Movement Mortgage. His number is (910) 920-7283.

Thanks, Dana Jumper
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