Profile picture for bfin
  • bfin
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We plan on purchasing another home and keep our existing home as a rental.

When we purchase another primary residence we plan on keeping our existing home as a rental.  Can we add the monthly rent payment we will be receiving to our income to qualify for the new mortgage?
  • April 15 2010 - Southern Pines
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Answers (6)

Profile picture for Kelly Curran
Best thing is to talk to your next lendor but as a rental property if it is your first they do want to see it as a rental on the taxes for 2 years before they will take the rental income as income for you - and you need to qualify to carry both mortgages. However things change with lending all the time so check there first. I have heard that VA (Vetrans not Virginia) are allowing 2 VA mortgages in different state - again it could have changed.
  • September 28 2012
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Profile picture for natewolf
Rent you receive is considered income. Most lenders only count 75-percent of the rent as actual income, with 25-percent toward expenses such as taxes and upkeep and overhead.

You can discuss this with your lender. Contact your local banker, a broker here on Zillow, or even a credit union you are a member of, and they can give you an estimate of what it will take to purchase and what your budget will allow in purchase price of your new home.
  • May 10 2010
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That's 75% of the income on the rental. You'll need 6 months PITI reserves on the rental and 2 months on the purchase. You'll need rental income insurance. You'll need a property management company if you do not have 2 years of property management experience. You'll need to qualify with both payments. Your maximum allowed debt-to-income ratio is 45%. That's all folks. .... Happy funding, Rudi
  • April 15 2010
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Then yes you'll be able to use the rental income to offset the old payment.
  • April 15 2010
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Profile picture for bfin
  • bfin
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We have over 50% equity in the rental home.
  • April 15 2010
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If you have sufficient equity in the property you are vacating, yes.
  • April 15 2010
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