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Answers (7)
- Ted Wangsanutr, "Ted Wangsanutr"
- Contributions:18
Hi Melou,
You'll definitely want to contact your mortgage lender first. There are several factors that need to be taken into consideration. From what I've heard recently, for rental income to be considered, you have to have a history of renting property for 2 years. This means documenting receiving income, i.e. claimed on your tax returns. In addition, if you don't have at least 30% equity in the home that you are vacating, I believe you have to have 6 months of PITI (principal, interest, taxes and insurance) in reserve. Lastly, they will probably not allow you to use a very small down payment, requiring possibly 10% or more.
Best advice to give would be to check with your mortgage lender. Best of luck!
You'll definitely want to contact your mortgage lender first. There are several factors that need to be taken into consideration. From what I've heard recently, for rental income to be considered, you have to have a history of renting property for 2 years. This means documenting receiving income, i.e. claimed on your tax returns. In addition, if you don't have at least 30% equity in the home that you are vacating, I believe you have to have 6 months of PITI (principal, interest, taxes and insurance) in reserve. Lastly, they will probably not allow you to use a very small down payment, requiring possibly 10% or more.
Best advice to give would be to check with your mortgage lender. Best of luck!
- Gail Wyatt, "Gail Wyatt"
- Contributions:6
Check to see if you have a due-on-sale clause on current mortgage. Make sure your income will allow you to get a new mortgage on your new home. Call your accountant for tax advice.
- Nicholas Ribeiro, "NicholasRibeiro"
- Contributions:1807
Contact your lender and ask them. There are tons of different mortgage programs for this and they will give you all your best options.
- Jim Starwalt, "jimstarwalt"
- Contributions:2512
Most lenders these days are requiring that you have been renting the home for over a year before they will consider the home as a rental investment. The reason is to avoid a strategic default. This where you buy the new house, move into it, and let the first just go into forclosure. It is pretty tough these days to convince the underwriter of the loan that this is not what is going to happen. Be very careful of this process, even if your lender says yes, no problem, let's rent your home and buy the new one, it's the last review of the loan at underwriting that is killing these deals. Have any lender triple check with the underwriters of your loan that they will approve this before you move forward. Jim
- Aimee Anderson, "Aimee Anderson"
- Contributions:3
The best thing to do is ask your lender. She will let you know if you qualify to this. Then the tax question is best anwered by your accountant. Wish I was more help but a talk with your lender and your accountant is going to be your best advise.
- wetdawgs
- Contributions:26833
I suspect you'd keep things above board if you paid the mortgage and she paid rent to you. Yes, her payments need to be declared as income in your taxes. You will have the option for deduction of depreciation and various repairs.
Talk with a lender about what you need to do (down payment percentage, income qualifications etc) for having two properties.
Talk with a lender about what you need to do (down payment percentage, income qualifications etc) for having two properties.
- Nan Brennan, "Century21 First"
- Contributions:194
Hi Melou,
My suggestion would be to contact your tax preparer to see if you can claim the payments as rental income and contact a mortgage banker to see if you would qualify for another mortgage. If your looking to buy an additional home I would love to help you if you are in Wisconsin but it looks like you might live in Jamaica.
Best wishes to you.
Nan
Century 21 First Realty
Appleton, WI
www.nan-brennan.com
My suggestion would be to contact your tax preparer to see if you can claim the payments as rental income and contact a mortgage banker to see if you would qualify for another mortgage. If your looking to buy an additional home I would love to help you if you are in Wisconsin but it looks like you might live in Jamaica.
Best wishes to you.
Nan
Century 21 First Realty
Appleton, WI
www.nan-brennan.com
I want to buy a new home and rent the old one to a family member, possible??
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