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I'm trying to purchase a new home and rent out the current one. can I get a loan before I actually

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October 17 2013 - US
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Answers (9)

If your debt to income ratio can handle both debts at once then no problem.  If not some loan products will allow you to count the rental income from your old place to improve the debt to income ratio. Would be happy to help you look into your situation and see what we could come up with.

Regards,
Brynn

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October 21 2013

You can come at this a couple ways with builders.  For you to pull your own construction loan you will need show you can carry the loan.  If you want to live in your current place then that means carrying both loans.  This can be difficult for soom.  Another option would be to sell your current home, rent while you are building. This would free you up to only have one loan.  Another option would be to get a builder to carry the loan for you until the end of construction.  But that means you MUST seel (given you can't carry both loans) and that puts you in a bind come end of completion.  In all honesty, I've helped about 70 people do this over the past year or so, and it's often times better to sell first and rent if you can't carry both loans.

Jay Feaster

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October 18 2013
It would probably come down to whether your income can support both payments (keep you under the allowable debt-to-income ratios).  If it cannot, you would have to look at using the rental income to qualify.  Most lending guidelines require that you have a history as a landlord (can show 2 years of rental income on your most two recent tax returns) before the lender will count rental income into your Debt-to-Income ratios.
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October 18 2013
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I'm in a similar situation.  I was told I need to have 30% equity in the property and then they would use 75% of the rental income.  They also required a signed lease before closing.
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October 18 2013
If your finances are strong enough to support both homes, then yes it is possible. The important thing to keep in mind is that this will be considered your second home. This means that your new loan may require higher rates and down payment. The next step for you would be to speak with a lender to discuss your options. Lenders like myself would be glad to speak with you to help you get the loan that you need. So if you have any other questions or need a loan, please contact me through the information on my profile page. I hope this helps and good luck!
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October 17 2013
Hello,

Yes, its possible you could qualify while still owning your current home.  Do you plan on renting it out?  If you need to use the rental income you have to have  a certain amount of equity build up.

Contact me through my profile and I can help you to fully pre-qualify and answer all of your questions.

We are a Federally Chartered Bank that lenders in all 50 states and has been open since 1905.

Good lock!
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October 17 2013
If you can budget for both homes, yes, you can rent out the current one and buy another one. 

However, if you need that rental income to qualify, it would be unlikely that many banks could consider your rental income as income until some time has passed.  Hard to evaluate how well your tenants pay or how well you manage a property with no track record.  For the most part you would need at least one year of that rental income to show on taxes. 
There may be some small local banks in your area that can do it, but you'll probably have more limited loan options than a typical bank.  
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October 17 2013
First step would be to get pre-approved to make sure that you would qualify renting out your current home.  The questions was cut off, but I am assuming it had something to do with no rental income on tax returns/no history of renting.  Depending on your equity in your current primary, you may be able to use that rental income.  But, please consult a mortgage lender for pre-approval prior to making any moves.

Best of luck,

Bryan
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October 17 2013
We have no idea, it is possible you could. Go see a couple loan officers and see what they say.
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October 17 2013
 
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