mortgage loan approval question?

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if i rent my current home, will this mortgage debt be considered for my application for a second home loan. I have my first home is rented, where tenants are paying the mortgage. So will it be debt against me when i apply for second single family residence. What do i have to show (to mortgage lender) for it to NOT be considered debt. I really want to get a mortgage for a second home. Please qualified people answer this. Serious only. thanks

  1. Reply
    April 30, 2011 at 12:37 am

    Of course it is debt and it has to show.

    But you have all that rent money shown as income on your income tax return, they will count it.

  2. Reply
    April 30, 2011 at 1:20 am

    I think you mean you wish to rent your current residence out and to purchase a new primary residence. Let me know if I misunderstood but terminology is important-second home means a vacation home or more specifically, a non-primary residence, non-income generating property and the rates and guidelines are tougher.

    You will need to have 30% equity in the property, a signed lease agreement, proof of a one month security deposit paid and held by you and 6 months of PITI reserves for the rental. If you have all of these, then the UW will obtain an appraiser’s rental market analysis to confirm that the rent being charged is within the market value and then will permit 75% of the monthly rental income to offset 100% of the monthly payment.

  3. Reply
    the kid
    April 30, 2011 at 1:42 am

    Of course it will be considered. ALL debt is considered. It will ALWAYS be considered debt, b/c it is. The lender will want to see rental income for a year or so.

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