where to find rules/information

[Anonymous]

i really need some guidance.

I own a property with a 15 yr mortgage. at the time of purchase it was my primary. now looking at it i want to hold it as an investment. when i goto apply for another mortgage, my understanding is they will not take 100% of the rent as income.. but they will look at 75%. Where can i find this in writing? is it state specific? loan type specific? I've tried asking some local brokers but I cant seem to get a straight answer.

Thanks so much!

if you can please shoot me an email on where to go or contact most appreciated nxn459@hotmail.com

[JuliaTN]

The 75% rule is fairly typical but isn't set in stone. You'd get different answers from different lenders because of their specific underwriting rules. You will rarely find a lender that will consider 100% of rent as income because they are assuming (rightly) that there will be repairs/vacancies/other expenses that will amount to at least 25% of the expected income.

[Anonymous]

so basically i really need to do alot of shopping and reading when i apply for a loan? Is it possible to get a copy of the uw guidelines prior to submitting an app?

[JuliaTN]

In a nutshell, yes, do a lot of shopping.

When you aren't just an employee with a W-2/paystub to show a lender for your income there are going to be a lot of variables to consider. Many will require a signed lease in order to consider any rental income at all. 

I've never asked a lender for a written list of underwriting rules but most loan originators should be able to answer any related questions up front before you apply, especially if you can give them your FICO scores and a list of all minimum monthly payments.

Make SURE you get a good faith estimate and compare all of the expenses when deciding which lender/loan to go with.

[DallasLoanGuy]

Fannie/Freddie/FHA all give 75% or rent due to maintenance/occupancy.

there used to be some subprime deals that would take more iirc

[Anonymous]

Actually, with proof of a true landlord's insurance policy (one that covers for not just property damage, but income insurance if you have an extended vacancy), there are lenders who will use 100% income. HOWEVER, another snag you will run into are lenders who are property tax savvy and will up the tax portion of that property's payment in case you live in a state where you receive a tax break for a property being your primary residence. All of these exceptions are fewer and farther between, and I'm not sure I'd count on finding one. You're going to have more luck charging more rent to cover the 25% then you are trying to find a lender to make that exception. Chose your battles wisely.