Renting current home and buying new house

How does this work? I want to buy a new house and try to rent our current one. Is it hard to find renters? Is it hard being a landlord? Is it worth the aggravation?

Also, in terms of financing how do you get approved for a new home if you still own another house? Do they ask for proof that it is being rented and if so, what is the proof?

TIA!!!!

Oh yeah, and any realator/mortgage recs?

Re: Renting current home and buying new house

first- I would speak to a mortgage professional and see if you would qualify for another mortgage

the rent from your current house would count as income - but only 75% of it

it can be done- it's a little complicated these days b/c so many people are defaulting on the first loan after then buy the second house

Re: Renting current home and buying new house

We wound up not doing it because of bad luck with 2 different sellers.

It's doable, but they're very strict with mortages. I don't remember the exact details but since we didn't have enough equity in house 1 we had to have 6 mos worth of mort pymts for both homes. This is so your less likely to bail on the 1st mort. We also had to write a detailed letter as to why we were buying a 2nd house in the same area.

I really don't think they counted 75 percent of the rent as income. Maybe because it wasn't rented at the time. You also need to provide a signed lease that it is rented, I think we needed it at closing.

We also had to have house 1 appraise at a certain value. There were some other things but I thing it really depends on the situation. We were confident we could rent our house out easily since we have in the past. Hth! GL!

Re: Renting current home and buying new house

We own two homes! One is South Carolina and one up here! It can be done the proof they asked for was the lease agreement with our tenants in the SC home. That has only been a investment home never lived in it! Its hard being a landlord out of state but thankfully we have our Inlaws that live on Hilton Head so they keep an eye out for us.

Renting current home and buying new house

I am actually just dealing with this. DH and I own a co-op and want to buy a house (live in the house and rent out the co-op). We were told by several different banks that we can't count the co-op as rental property unless we have rented it out for 2 years (as shown on our tax returns). If the apt isn't rented out for that long, you need to be able to afford both mortgages (and taxes and all that other stuff) at the same time in order to get approved.

Kind of ridiculous, but i do see where they're coming from.

Re: Renting current home and buying new house

We have 2 homes, one in Long Beach and one in Suffolk. We rented out our one in Long Beach successfully but I will say that the location made it pretty easy to find renters (knock on wood). I would also highly recommend renting through a real estate agent because we first tried through craigs list and it was a nightmare. An agent will do all the necessary leg work for you and we felt much more comfortable having a professional handle it. As Beth mentioned above as well, before we were able to secure our second mortgage, we needed to show that both apartments in the house were rented with the agreements, and the income was only counted at 75%. It can be done though. Good luck!