Hi, I am in the process of purchasing my first home. I would like to eventually move into another home and keep the original as a rental property. However, I have heard mixed reviews on how much of a downpayment would be required on the second home (my eventual new primary residence), given that I will own another property as a rental. I was told that 20% down would be required for the home I'd move into because of the increased risk brought by the rental property.
Can anyone provide clarity on this? Ideally, I would not have to put 20% down on a future new primary residence as it would free up cash flow for others investments in the meantime.
@Jonathan Permetti a lender is going to look at your DTI on a primary whether you own 1 rental or 8 rentals. It's not "increased risk" - it's just whether you qualify to borrow the amount you are looking to borrow based on your overall debt, or not.
@Nicholas L. Thanks for the response. I'm assuming in that case that the mortgage from your rental would count towards your personal DTI. Or could that be offset by transferring ownership of that first property to a LLC that you own?
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