Renewing Leases
Greetings. I expect to be refinancing in about a year. I have a mortgage guy telling me that I have to have current leases for the loan. I have 4 units, with leases that continue month by month after the first lease period is over. My tenants HATE to sign onto a new lease, but have no problem going month to month. What is the prevailing wisdom on this? When I was a renter, my landlords never asked me to sign a new lease
I would ask the mortgage guy just what he means by "current" leases.
Without knowing just what he meant, I can only suggest an interpretation. If you are claiming a certain amount of monthly income from each unit, then the mortgage guy wants to see a written lease that states that amount.
For leases that continue month-to-month after the initial lease term, your mortgage guy is going to want to also see the lease amendment (addendum, modification, or extension) that states the current rental amount each time you have a rent increase.
The only thing the mortgage guy should need is current leases. Even if they are month to month, they are current and will suffice.
[addsig]
The leases are hardly looked at by the underwriter. They check the address and the amount and that is about it. If they are all new and all the same ink and all the same name then they may investigate. You should be OK with what you have. I submitted over 150 leases on 1 application once. You can do no doc loans too that do not require as much hastle. Generally a little higher rate but worth it to me.
Good LUCK and Thank You
Hope this helps some
Ted Jr
My leases have an automatic renewal and they all run 12 months. Advance notice (60 days) is required to not renew.
ItzMe