Well, I have heard this time and time again but here is some criteria when trying to rent your current home and qualify to purchase another home. This is possible to do IF you can meet the criteria that is a little more strict than we were use to just a few years ago
VA- 1 year lease agreement/ proof of security deposit going into borrowers account.
*75% of rental income can be used
FHA- 25% equity in the home (documented by a current property valuation), along with a 1 year lease agreement and proof of security deposit going into borrowers account.
-there are some exceptions such as a job transfer cross country
*If all criteria are met we can use 75% of rental income to off set payment
Conventional- 30% equity in home (documented by a current property valuation) along with 1 year lease agreement and proof of security deposit going into our borrowers account
-Fannie Mae/ Freddie Mac require a minimum of 2 months PITI reserves per property owned.
*If all criteria are met we can use 75% of rental income to off set payment
Mortgage Insurance- requires 6 months PITI reserves per property owned. If property has greater than 30% equity (documented by a current property valuation) then only 2 months PITI reserves per property required.
-If the home has been rented out already for a few months an underwriter can call for proof of those deposits into borrowers account.
-Needed documentation is always at an underwriter’s digression.
-If you have had a home as a rental for over a year, no amount of equity is required. However, filed federal tax returns will be required to document income. Also, 3-6 months PITI reserves will be required per property.
Article provided by Mariah @ Legacy Mortgage
Request for more info
If you would like more info please fill out this form and we will get in touch with you shortly. In the "comments below please enter the subject you want more info on. Thanks for your time!
