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Converting Primary Residence into an Investment Property

Due to property values and potential fees associated with selling our house and because we have been interested in becoming landlords for a while, my wife and I are considering turning our current home into a rental property when we buy our next house.  We have excellent credit, both better than 780.  Our current property has less than 10% equity.  How can we calculate what we might qualify for?  How much down payment will be needed to qualify for a mortgage?  Are there additional things we need to be aware of?  
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April 02 - Denville
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Answers (5)

With less than 25% equity, you have to add the housing expense of your old house to the housing expense of your new house, and other monthly obligations for your monthly debt calculation.  Housing expense is mortgage, taxes, insurance, HOA dues.  Other montly obligations are items that show on your credit report like car, student, installment loans, and credit card payments, child/spousal support.   Divide all of that by your gross montly income.  Each lender will tell you what that ratio should be, but generally, under 43%.
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April 08
You will not be able to offset the mortgage with any rental income therefore you will need to qualify with both mortgages.  Feel free to contact me through my profile to discuss further.
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April 02
I grew up in Morris County and know Denville very well.  The truth is in order to give you all the options an application would need to be taken so we can put together the Primary soon to be rental property and get an idea of what you are looking to buy.  Everything we do is no cost up front, please look me up in my profile.  I would be glad to help.
Thanks,
Dave 
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April 02
You would need at least 25% equity. Not unless we were able to do a VA loan. As far as the amount required for the down payment 5% would be sufficient. I would have to review your entire situation in order to become the GPS to a perfect mortgage. Feel free to contact me through my profile for a no cost, no obligation rate and fee estimate.
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April 02

There must be at least 30% equity to be able to use rental income to offset your current mortgage payment.  You will need to qualify with both mortgages.

It would be best to speak to a loan officer to determine what you might be able to qualify for.

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April 02
 
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