1st time buyer question: how does buying investment property 1st affect my mortage options?

[patb]

well Sane lending would look at a rental and say

“if you can show 125% Debt service coverage ratio
then anything above that is income to you, particularly if you have a tenant with good credit and a 2 Year mortgage.”

the other is Net after Debt,

[SD Realtor]

If I were you I would talk to a few mortgage professionals before you do anything.

First off the lending standards are VERY fluid and change according to market conditions. The standards in place today are markedly tighter then 2 years ago.

Second off, try to think about the future. Do you believe rates and standards will be higher and more strict 3 years from now, or lower and looser? Ask yourself that and answer honestly.

Third, go to a BofA or go online to Aim Loan and call them up. Pose as a buyer who has a rental property and wants to buy a home. See what the requirements are. Basically no matter what you say or show for your rental, the lender will have their own criteria. Many lenders will only give you income based on 75% occupancy no matter what you say or show.

So to be honest, my OPINION, is that having the rental property will more then likely not help your debt to income ratio. Just my opinion but you would be much better off talking to a mortgage professional.

[SD Realtor]

If I were you I would talk to a few mortgage professionals before you do anything.

First off the lending standards are VERY fluid and change according to market conditions. The standards in place today are markedly tighter then 2 years ago.

Second off, try to think about the future. Do you believe rates and standards will be higher and more strict 3 years from now, or lower and looser? Ask yourself that and answer honestly.

Third, go to a BofA or go online to Aim Loan and call them up. Pose as a buyer who has a rental property and wants to buy a home. See what the requirements are. Basically no matter what you say or show for your rental, the lender will have their own criteria. Many lenders will only give you income based on 75% occupancy no matter what you say or show.

So to be honest, my OPINION, is that having the rental property will more then likely not help your debt to income ratio. Just my opinion but you would be much better off talking to a mortgage professional.

[SD Realtor]

If I were you I would talk to a few mortgage professionals before you do anything.

First off the lending standards are VERY fluid and change according to market conditions. The standards in place today are markedly tighter then 2 years ago.

Second off, try to think about the future. Do you believe rates and standards will be higher and more strict 3 years from now, or lower and looser? Ask yourself that and answer honestly.

Third, go to a BofA or go online to Aim Loan and call them up. Pose as a buyer who has a rental property and wants to buy a home. See what the requirements are. Basically no matter what you say or show for your rental, the lender will have their own criteria. Many lenders will only give you income based on 75% occupancy no matter what you say or show.

So to be honest, my OPINION, is that having the rental property will more then likely not help your debt to income ratio. Just my opinion but you would be much better off talking to a mortgage professional.

[SD Realtor]

If I were you I would talk to a few mortgage professionals before you do anything.

First off the lending standards are VERY fluid and change according to market conditions. The standards in place today are markedly tighter then 2 years ago.

Second off, try to think about the future. Do you believe rates and standards will be higher and more strict 3 years from now, or lower and looser? Ask yourself that and answer honestly.

Third, go to a BofA or go online to Aim Loan and call them up. Pose as a buyer who has a rental property and wants to buy a home. See what the requirements are. Basically no matter what you say or show for your rental, the lender will have their own criteria. Many lenders will only give you income based on 75% occupancy no matter what you say or show.

So to be honest, my OPINION, is that having the rental property will more then likely not help your debt to income ratio. Just my opinion but you would be much better off talking to a mortgage professional.

[SD Realtor]

If I were you I would talk to a few mortgage professionals before you do anything.

First off the lending standards are VERY fluid and change according to market conditions. The standards in place today are markedly tighter then 2 years ago.

Second off, try to think about the future. Do you believe rates and standards will be higher and more strict 3 years from now, or lower and looser? Ask yourself that and answer honestly.

Third, go to a BofA or go online to Aim Loan and call them up. Pose as a buyer who has a rental property and wants to buy a home. See what the requirements are. Basically no matter what you say or show for your rental, the lender will have their own criteria. Many lenders will only give you income based on 75% occupancy no matter what you say or show.

So to be honest, my OPINION, is that having the rental property will more then likely not help your debt to income ratio. Just my opinion but you would be much better off talking to a mortgage professional.

[Werewolf]

Thanks for the feedback

My numbers for the condo

Price – 315K
Mortgage ~ 250K
Assuming 5 to 6% interest rate
Taxes 1.1%
Insurance 1%
HOA $300 a month
Market rent – 1600-1700 a month

Would be owner-occupied at the start

Not great I know but it’s close to a college which I think would help the occupancy question

Thoughts?

[Werewolf]

Thanks for the feedback

My numbers for the condo

Price – 315K
Mortgage ~ 250K
Assuming 5 to 6% interest rate
Taxes 1.1%
Insurance 1%
HOA $300 a month
Market rent – 1600-1700 a month

Would be owner-occupied at the start

Not great I know but it’s close to a college which I think would help the occupancy question

Thoughts?

[Werewolf]

Thanks for the feedback

My numbers for the condo

Price – 315K
Mortgage ~ 250K
Assuming 5 to 6% interest rate
Taxes 1.1%
Insurance 1%
HOA $300 a month
Market rent – 1600-1700 a month

Would be owner-occupied at the start

Not great I know but it’s close to a college which I think would help the occupancy question

Thoughts?

[Werewolf]

Thanks for the feedback

My numbers for the condo

Price – 315K
Mortgage ~ 250K
Assuming 5 to 6% interest rate
Taxes 1.1%
Insurance 1%
HOA $300 a month
Market rent – 1600-1700 a month

Would be owner-occupied at the start

Not great I know but it’s close to a college which I think would help the occupancy question

Thoughts?

[Werewolf]

Thanks for the feedback

My numbers for the condo

Price – 315K
Mortgage ~ 250K
Assuming 5 to 6% interest rate
Taxes 1.1%
Insurance 1%
HOA $300 a month
Market rent – 1600-1700 a month

Would be owner-occupied at the start

Not great I know but it’s close to a college which I think would help the occupancy question

Thoughts?

[EconProf]

Your P & I is about 1250/mo., assume 10% off your rent for vacancy, fixup to make rent-ready, etc., HOA of $300 and you have a negative cash flow, not even considering the opportunity cost of the $65k down and the transaction costs. Why would you do this?
OTOH, you plugged in 1% for insurance–way high. Why even get ins. on a condo since the HOA covers it?

[EconProf]

Your P & I is about 1250/mo., assume 10% off your rent for vacancy, fixup to make rent-ready, etc., HOA of $300 and you have a negative cash flow, not even considering the opportunity cost of the $65k down and the transaction costs. Why would you do this?
OTOH, you plugged in 1% for insurance–way high. Why even get ins. on a condo since the HOA covers it?

[EconProf]

Your P & I is about 1250/mo., assume 10% off your rent for vacancy, fixup to make rent-ready, etc., HOA of $300 and you have a negative cash flow, not even considering the opportunity cost of the $65k down and the transaction costs. Why would you do this?
OTOH, you plugged in 1% for insurance–way high. Why even get ins. on a condo since the HOA covers it?

[EconProf]

Your P & I is about 1250/mo., assume 10% off your rent for vacancy, fixup to make rent-ready, etc., HOA of $300 and you have a negative cash flow, not even considering the opportunity cost of the $65k down and the transaction costs. Why would you do this?
OTOH, you plugged in 1% for insurance–way high. Why even get ins. on a condo since the HOA covers it?

[Author]

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