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Can you get a mortgage on a home with a mortgage on another home?

I own a townhouse that I rent out.  The rent covers the mortgage and fees so it takes care f itself.  I have an opportunity to purchase a home that I currently care take and I wonder if I can  get a mortage for the house I care take.  Do the banks take into consideration that I also have a townhouse mortgage?   How difficult is it to get a mortgage under these circumstances?
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October 24 2010 - Haverhill
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Answers (5)

The answer is yes...maybe.  How long have you rented the townhouse?  Most lenders are wanting two years landlord experience before they will use the 70-75% net rent as allowable income.  Also, how long have you owned the townhome? Seasoning on the purchase (if you bought it as a owner occupied is crucial and a lender is going to want to know why you don't live in it now, if that is the case).  Celia is correct about lots of questions...contact a lender for specifics on your situation.
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October 28 2010
If you have good credit, steady income and can afford taking on the new house then you should not have a problem adding the new property to your portfolio.  It is key that you speak to a good lender because there are many options available for financing the new property.  As a first measure you should run a quick debt/equity liquidity ratio on your finances and see what level your at.  Essentially, add up all your fixed monthly payments and divide that by your month income.  If its in the 30% range your most likely going to get financing.  



Best of luck with the purchase!
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October 28 2010
You will probably need a good down payment unless you did not buy the first place as your primary. Speak with several lenders to make sure you are well informed about your loan options. This should be ok long as your credit record is good and job history good.
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October 25 2010

You should prepare yourself for a flood of questions and also to be able to document your situation.  Do you pay rent now?  There are many factors to consider and prepare yourself for ...
Sincerely,
Celia

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October 24 2010
Good for you!  It's much easier to get a mortgage on an owner occupied home.  The downside is an underwriter may only give you 70% credit of your townhome rental income.  I've been in this same scenario before, so get with a qualified mortgage broker that can assist you.
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October 24 2010
 
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