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How long does a home need to be rented before the rental income is counted toward the debt ratio?

I am having trouble selling my home and am considering renting it out.  How long does it need to be rented in order for an underwriter to count the rental income toward the debt ratio?
  • December 05 2012 - Centennial
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Answers (4)

That is a good question The truth is a good lender will be able to use the income instantly with no track record of landlord history. For example if you wanted to buy an investment property you would be able to use 75% of the rent schedule for the property determined by the appraiser.

This provision allows for investors to buy a property that makes sense financially, but they might not qualify for without using the investment income.

Simple answer you can use rental income from day 1, with a lender that specializes in complex transactions like we do.
  • December 05 2012
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Hello and thank you for posting this question.

Generally speaking most mortgage professionals are going to answer that these days you need to have at least 2 years as a proven land lord before they will allow you to use rental income to qualify.  They some goes as far as seeing if you have at least a 30% equity stake in the property as well.

The most successful I have ever gotten around this was I was able to use a portion of the rental income towards property taxes and Insurance.


I hope this helps

Chris Perez - Real Estate Finance - San Francisco, ca
  • December 05 2012
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Yes, but it was prior to my filing bankruptcy 3 years ago in which I include one rental. :(    
  • December 05 2012
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Do you have a history of being a landlord?  Our guidelines may allow us to count a percentage of your rental income right away.
  • December 05 2012
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