A topic that has been coming up lately are questions surrounding rental properties:
I have listed below a Question/ Answer format so you have some ideas of a scenario that works with your situation - please call me with any questions:
Q 1. I am thinking of buying a new home, but wish to rent my current home out, how can I do this?
A 1. The first step is to get a consent on file with me so I can take your credit application and determine if you can afford two properties. Once we know you qualify for two properties we have two options: a. you can find someone to rent your home and provide a rental agreement or b. we can get an appraisal on your home with market rents to determine what the rental amount will be - NOTE: never order this yourself as the lender has specific appraiser and they won't use your report.
What else you need to know: You will need a down payment of 5% for the purchase of the new home - more down payment is always better to avoid fees and at the bottom of this Question/Answer section is a link of things you should know as a landlord.
Q. 2. I have found a rental property I wish to purchase, I already own one rental property and have the home we live in - how do we get started?
A. 2. The first step is to get a consent on file with me,
I can take your credit application and determine your affordability for the 3rd property. You will also require a 20% down payment of the purchase price plus 1.5% in closing costs. Usually we require your T-1 generals and rental agreement as well so we can use your current rental income to offset your debt to income on the application. This increases your purchasing power. When you are looking at multiple properties you do need to have excellent credit.
Q.3. How many rental properties can I have?
A. 3. Every lender has different guidelines - it is better to have a broker represent you with rental properties as we have access to a number of lenders which gives you the opportunity to have a bigger rental portfolio and more competitive rates. Usually banks can do 3 rental properties and 1 owner occupied - call Amy 780-919-0475 anytime to go over the scenario you have.
If you are thinking of becoming a landlord - or you have rental properties this site is very helpful
Becoming or you are a landlord?