Mortgage experts needed..please help

[Anonymous]

We currently live in a condo in NJ...we bought it for 160000 about 6 years ago...they have been selling for 250K-275K (we owe about 142000). My question is we would like to keep the condo, we have two qualified people who want to rent our place in a lease. We want to buy a home, can we do it, our credit scores are an average of 730-740s. We would like to look for a home at about 350k to 375k if possible with a good down payment. Just need to get some ideas how we can do this. Thanks in advance

[BrianB_The_Loan_Professor]

MGB welcome to the boards

How much is your income and current monthly debt

They havechanged the rules about using rental income recently so unless you have a equity you will likely have to qualify for the new purchase and still count the debt from the condo.

The credit wont be an issue as it sounds like you have your act together there.

Brian

Message Edited by BrianB_The_Loan_Professor on 11-09-2008 05:23 PM

[ShanetheMortgageMan]

If you have 30% equity in your current condo (25% equity for FHA) then with conventional financing you can include rental income from your current primary residence which would be converted to a rental property, if you have:

1. Executed lease agreement
2. Rental security deposit receipt
3. Evidence of security deposit going into your bank account (such as a bank statement or a cancelled check from the tenant)

Since you have the required equity, just get those 3 items above and you can use the rental income to qualify for the new purchase.

With your FICO scores and less than 5% down, FHA usually ends up working to be the best, 5-10% down then FHA & conventional are both good to look into, with 10% or more down then conventional usually offers the best deal.