Contractor · Olmsted Falls, OH · Member since 2012 · 24 posts · 7 votes
My wife and I are looking at buying a new home in the next 6 months to a year. My question is, am I able to rent out our current home under the original mortgage, but still obtain a new mortgage for the new home?
I've read that some banks won't allow you to do this (I am reading through our bank paperwork this weekend), but I've also heard that banks don't care as long as the checks clear every month.
Has anyone done this sort of thing, or have any knowledge of someone doing this. I don't think I would have any problems renting out my current home as I have already asked around about renting it and had several people ask me if it was for rent.
Bottom line: What are my options, if any?!?! Thanks in advance.
Unless your current loan has some specific restrictions, yes, you can do this. Some loans, especially ones for first time buyers or that have some sort of subsidy, do have restrictions on how long you must live there. So check your loan documents.
Keep in mind you will have to qualify for both loans and any rental income will not be counted. Once you have been a landlord for two years, then you will be able to include rental income when qualifing for a new mortgage.
That shouldn't be an issue if 1 - you have enough income for both houses or 2- you already have your current residence rented out showing that you don't need t eh extra income. They look at one or the other (sometimes both).