Renting current home, looking for new mortgage

NuMelc · ‎09-24-2014

We are looking at renting our current home and buying a new home in another city. With doing this, will our current mortgage be looked at on our DTI since we are receiving rent money for it.

Our current mortgage payment is $805 monthly, but we will be renting the home for $1000 a month and already have a potential tenant lined up.

Ideally we would just sell the house, but we tried to sell last year and after it sat on the market for about 8 months with no serious offers, we decided to unlist it. I think renting now may be a better option until the market in our area recovers some. However, our current home is the only one we've ever owned and and I've rented a property. We are fortunate to where we would be able to get enough to pay off the mortgage if we were to sell, but that is far below the appraised value and I don't want to just give it away if we can generate a little extra income by renting it and sell it once the market improves.

Thoughts?

Thanks for any insight.

Anonymous · ‎09-24-2014

Yes most places won't take your income and the current mortgage would be added to your debt. There are some exceptions

coterotie · ‎09-24-2014

VA underwriting guidelines allow you to count the potential rental income if the underwriter knows the area and rentability. FNMA guidelines allow you to count the rental income against the mortgage after 12 months. If your DTI won't support it, my suggestion would be to rent the old house, rent the new place and hunt for something you want to buy. Rental property may be the best investment idea for the next 12 to 15 years. Just ask the guy who made 4.9 billion by predicting the mortgage crisis. (john paulson)

@Anonymous wrote:
Yes most places won't take your income and the current mortgage would be added to your debt. There are some exceptions