Buying a Rental or Primary Residence First

[Nick Delfin]

Hey everyone!

I am looking to purchase my first rental property sometime in the near future (within 6 months).

My question is, does getting a mortgage for a rental property affect my credit if I am looking to buy a primary residence in about a year.

Will I be denied for a primary residence if I have my mortgage for my rental?

Thanks in advance,

Nick

[Cassi Justiz]

Hey @Nick Delfin, 

I'm not a lender but here are a few things to consider. Your mortgage on a rental will impact your ability to get a mortgage on a primary residence. Now, how MUCH it will impact you is going to be based on your credit, your other debts, the lease terms of the rental, etc. Most lenders will factor rental income into your "income" but they all have different rules on this. Generally speaking, lenders like to see 2 years of "income" before they count it. You'll also likely have tax deductions for your rental property, so that can factor in to this equation as well. 

Your best bet is going to be to meet with a local lender and come up with a game plan. They will look at your current debt, income and credit profile. They'll be able to use this info to let you know how much rental (or primary) residence you could qualify for. They will also let you know what factors you need to keep in mind so one purchase doesn't negatively impact the other. Once you have this info, you can have a better idea of how to move forward.