Applying for personal SFH mortgage after house hacking

2 Replies

My husband and I have been house hacking a duplex for the past three years. We financed the duplex are currently at ~70% LTV. It has been a great financial decision for us and a great entree into REI.

In the next 2-3 years, we would like to purchase a SFH as our personal residence and maintain the duplex as an investment property. We have 2+ years of rental income history for the second unit and have been using the BP resources to help refine our processes while we still live on site. Based on research of comps for our unit, we should be able to cover all expenses (e.g. PITI, utilities, landscaping, CapEx, other maintenance, vacancy, turnover costs, etc.) with income for both units, plus some cash flow.

We are working on saving up for another downpayment, and I am trying to understand and plan for how the rental could impact our personal mortgage. Will the bank take into consideration any of the future rent for our unit? Is there a standard amount that we need to demonstrate is held in reserve for the duplex? Anything else we should know or prepare?

Thanks in advance!

@Caitlin Worrell The lender will do calculations what you have on your Sch. E.  Yes they will count 75% of rental income for future rent. You don't need liquid for reserves that can be in form of 401k or stocks. 

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