Can we buy a house, while renting our two other homes?
My wife and I each owned our own townhouses before we got married. We moved into hers and are renting out mine. We definitely need a bigger home, but the market is not good to sell our homes. Can we buy a house and continue renting out both our other townhomes? Will the bank or mortgage company allow this?
- chatsplasLv 79 years agoBest Answer
Have you saved enough for a down payment? Do you have very good credit? Do you have any other debt than the two mortgages?
It's the Whole package of you: credit rating, sufficient income, adequate down payment, stable employment, low debt ratio.
Rental property, with written leases are not valued at 100% of rental income, more like 65%.
The MORE you put down, the LESS you pay in interest over the life of the loan. Putting down 20% avoids extra costs of PMI.Source(s): real estate investor
- HEATHERLv 69 years ago
If you make enough money, have good credit, can make a downpayment of at least 20%, and show you have money in the bank, then yes. From the banks point of view, they will be thinking "ok, so what if you buy this new house, and both your renter's bail on you? How are we assured we will get our money?" That is where the larger downpayment comes in, especially if you don't have much equity in either of the townhomes. There may also be complications with your existing mortgages as you bought them as primary residences, and they have in fact now both become "investment" properties once you start renting them out.