WTB 2nd Condo, Will Rental $ Count 4 Mortgage?
My husband and I were pre-approved for $500,000, and we just bought our first home, a condo, for $300,000. We want to purchase a 2nd condo, and rent our current home. Will the rental income count for our mortgage? will it have to be rented prior to buying 2nd home? or will i just need rental agreement? any info appreciated.
I just found out that I will need a rental agmt, and that 75% of R. income will count in calc. my debt to income ratio. Is this what you guys have found to be true?
Oh- and also- I really didnt like the hassle of dealing with the mortgage co. that we just previously dealt with. I was wondering if there are any advantages of going w/ the same mortg. bank for my new loan?
Also- does anyone work with lenders ie: www.Ditech.com or other online lender.. and what is your experience? That was such a nightmare for my husband and I that Id really rather not have to go through it again (paperwork and very ignorant Mortg. processors)
Most loan programs will allow 75% of rental income. Some will go as high as 90%. When buying rental prop they'll use 75% of the market rent survey the appraiser does. In this case, I think you'll have to show a lease agreement.
The 75% of "market" rent is the industry standard. So you can not have someone sign a lease for $4K a month if market is $2K. The dollar amount not covered by the 75% rule is counted against you as debt.
Our broker is fantastic! He is realistic, honest, responsible, professional, and treats ALL our referrals with TLC.
If you debt is not out of control you may want to consider a multi-family 6+ units. These units can cash flow better than single family (depending on your area)
Good luck,
Eric & Rosa
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