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Buying a Second Home as a Primary Residence and renting out the first

Due to a change in job I have to move out of my current residence . Instead of selling my current home I am hoping to buy a new home near my new office and rent out my current residence . I am wondering if I can get a conventional loan (using the great low interest rate) on my second home ?
Below is my situation 
Current Home : on 5 Years ARM ( refinanced it last year paying around 3.25%)
Equity in Current Home : Around 30%
Down payment available for new home : Around 10%
Annual HouseHold Income : Around 200k 
Property Values of the two homes : Around 300k each 
Also if I move my primary residence to the new home will my interest rate in my current home change ?

Thank you for your time Guys ..
  • October 24 2011 - M Streets
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Answers (3)

Based on the numbers you provided you seem to be in good shape to get a the low market rates, if you provide a lease.  Your interest rate on your current home should not change but the terms are spelled out in your mortgage papers from when you refinanced last year.  Better yet, contact that lender you used for any clarification.

Are you staying in the same line of work changing jobs?  That's a critical part of getting approved for a loan.

The M-Streets are very popular, so I don't expect that you would have an issue renting your house.

You do need to speak to a lender.  There are several good ones that frequent Zillow, you can also put in for a quote, it's free.

Naima
  • October 24 2011
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If you plan on renting your vacated home you are purchasing a primary residence, not a 2nd home. Your current payments will not change until the ARM recasts.

Happy funding, Rudi
  • October 24 2011
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Depending on the Debt to income ratios you seem to be ok.  They will count that first debt against you until you get 24 months rental under your belt.  As long as your monthly revolving debt is not heavy then your income can support both. 

If the Mstreets is where the home is going to be bought or rented you will not have a problem there.  The area is very hot and has limited homes for rent and they rent quickly. 

You would want to go ahead an pre-qualify with a lender which I can give you a very stong referral.  If you want assistance from an experienced agent I would be happy to offer you my services.  I would be willing to help with getting the home rented at no charge as well.  You also do not pay an agent anything to help you buy a property. 
  • October 24 2011
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