My husband will be stationed on a carrier that is moving from a local shipyard in Newport News VA, to about an hour south of us in Norfolk VA. We just purchased our first home in Williamsburg VA with a Countrywide VA (veterans) loan of $230,000. We want to keep this house and rent it out to a family, and purchase a condo or townhouse closer to the shipyard in Norfolk, to live in while he is stationed there. I have heard that lenders don't include rent money paid to us when calculating our debt-to-income ratio. Is it true? and is there any other way to convince a bank to lend us more money for a second property?
2007-11-06 06:56:36 · 5 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
a lender may lend you money for the 2nd property if you meet the lender requirements...but VA doesnt allow you to rent the property within 1yr of owning it.
if you report 'rent' on it....well you know the rest.
2007-11-06 09:02:22 · answer #1 · answered by Anonymous · 0⤊ 0⤋
In order to get credit for the rent you're being paid, you need a signed lease, lasting one year or more. If the tenants are not yet in possession, you also need a copy - front and back - of the check for the deposit and/or first months rent (depending upon your state law - I don't work in Virginia).
They will only allow 75% of the rent, assuming a 25% vacancy factor (very high - where I am it hasn't been over 5% in at least 25 years), and they will deduct the full amount you're paying on the loan, pro-rated property taxes and insurance, HOA fees (if any), etcetera.
It is routine to buy another property and get another mortgage (even VA so long as their sum amount isn't over the current VA loan limit), so long as your debt to income ratio still falls within guidelines. That's pretty much what the vast majority of real estate investors does.
Here's an article about debt to income ratio in case you don't know what it is:
http://www.danmelson.com/2007/05/loan_qualification_standards_d.html
2007-11-06 09:01:42 · answer #2 · answered by Searchlight Crusade 5 · 0⤊ 0⤋
They can lend on a 2nd property. People do it all the time, but they want to see rents paid or a lease signed & ready to take action when you move into the new house. Depends on your credit, people have multiple mortgages all the time for rentals.
What about all the property mangers of private duplexes and such that only do that for a living? It has to count!
2007-11-06 07:16:38 · answer #3 · answered by Casie 4 · 0⤊ 0⤋
If you have a signed lease agreement for the property, lenders will consider this and not count the payment on this mortgage against you. Feel free to email me if you have any additional questions.
2007-11-06 07:14:34 · answer #4 · answered by Steve W 2 · 0⤊ 0⤋
The bank I work for will count it if you can verify it. If you haven't had any yet, you can't really count it because you can't verify it.
2007-11-06 07:10:32 · answer #5 · answered by Debdeb 7 · 0⤊ 0⤋