- Find a Real Estate Professional
- Realtors®
- Mortgage Lenders
- Home Improvement Pros
- Other Real Estate Services
- Review an Agent, Lender or Pro
- Marketing on Zillow
- Real Estate Agent Advertising
- Join the Professional Directory
- Popular
- Real Estate Market Reports
- More
Replies (9)
- Ray Blindauer, "SigmaWealth"
- Contributions:246
You can use the new rental income to qualify for the purchase of a new home. If you know you'll be closing on a certain date on the new home and you can rent your last home before close, you could qualify. I'm fairly certain the new tenant does not have to move in before you close on your new home, just that a new lease is in place.
You will need the 30% equity or more, a signed lease, the security deposit in your bank account and a good explanation as to why you are buying a new house. A good loan officer to package it all up nicely with a bow for the underwriter would not hurt either.
- Ray Blindauer, "SigmaWealth"
- Contributions:246
Chuck,
I've never used them, but Sunwest Bank has no equity requirement when converting a primary to a rental.
I've never used them, but Sunwest Bank has no equity requirement when converting a primary to a rental.
- Bob Willett, "SacRELender"
- Contributions:194
Chuck is correct. If you will be using Fannie Mae, Freddie Mac or FHA you will have to cover both payments and they will not count the rental income as Chuck said.
- Ray Blindauer, "SigmaWealth"
- Contributions:246
Bob, I'm not sure that's true and I didn't see where Chuck wrote that both payments will need to be covered. I know of several lenders who will count the rental income.
- Bob Willett, "SacRELender"
- Contributions:194
I said Chuck was correct. They will need to prove the 30% equity - probably with an appriasal - or the rental income will not be counted. If they do have the equity, his expalination is spot-on for what will be required.
- Gene Riggs, "govagent1"
- Contributions:72
I am a Federally approved and licensed loan officer with 35 years in banking and I have been a broker since 1974.
If you have a signed lease most lenders with accept 75% of the reantal income and that is a maximum figure. Now some underwriters with want to see 6 to 12 months payments on the rent or lease. Some do not require that. Check with your lender.
If you have a signed lease most lenders with accept 75% of the reantal income and that is a maximum figure. Now some underwriters with want to see 6 to 12 months payments on the rent or lease. Some do not require that. Check with your lender.
- Warren Whitaker, "Plano Mortgage Guy"
- Contributions:6
Most Fannie/Freddie/FHA underwriters that I know will require a 2 year history of rental income on your tax returns in order to use that rental income to offset the rental PITI. Per guidelines, the underwriter can use 75% of the rental income. The rental income will be treated the same as self-employment income...that is, the usual 2 year time frame for review and averaging. The underwriter will want to review your Tax Returns, including your Schedule E (this schedule is used to report rental real estate, royalties, partnerships, S corporations, estates, trusts, REMICs, etc. income) for income consistency and experience as a landlord. Hope that helps...good luck!
- Ray Blindauer, "SigmaWealth"
- Contributions:246
If any of you ever need a list of lenders who do not require any history of rental income to be able to use it for qualification purposes, let me know.
Can I qualify to buy new home and convert current to rental?
Stating a discriminatory preference in an advertisement for housing is illegal. If you think this content is discriminatory or otherwise inappropriate and feel it should be removed from Zillow, please let us know by completing the information above.
We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.