Broker, Superb Mortgage and Real Estate
I just wanted to clarify the answers below regarding counting the "projected" rental income when calculating debt to income ratios for a new loan... it's true that only 75% of the ACTUAL rental income will be able to count as income. What has not been mentioned here is that for it to count as income, the property has to have been rented for a period of two years. If you are looking to rent a property for the first time, not one bit of the "projected" income can be counted when calculating debt to income ratios.
Best of luck!
Solant Real Estate Advisors
Best of Luck!
It all depends on the type of financing you will be looking at and the current debt to value of the property. As my colleagues mentioned to you on their response the current financial situation of the condo will be a qualifying factor and if you are looking at FHA financing we have some additional variables that would be best answer by your trusted Mortgage Advisor. If you don't have one, Alfonso Delgadillo from Prime Lending is my referral to you. He is my prefer lender and he deals directly with all of my clients. Which some are in the same financial situation you and your family is in.
You will be qualifying without the condo, but your fiance will have to prove she's got the property under lease with a tenant, if she owes more on it than it's current market value, even if she puts 20% down on another property. A lender will want to know that she's not going to walk away from it when she buys another property, so it really depends on what's going on with the condo. If the condo is under water, she may have to rent it out for 12 months before buying another property.
If the condo has equity, she'll just need proof of rental income so she doesn't won't have to qualify for both properties. As Brian said, a lender can apply 75% of the projected rent.
Owning a rental isn't terribly difficult if you have a good property manager. Even with one unit, there's plenty of available information for landlords, and I do advise having a good real estate attorney on hand for legal questions and issues. A consult with an attorney could be the best money you ever spent. Judges tend to side with tenants, so be sure everything is done to the letter of the law.
Let me know if I can help with anything else, or if you'd like some good lenders to talk to.
Certainly the debt of the condo will factor into your ability to afford a new purchase. My advice is to speak with a Mortgage professional as soon as possible to know what your options are. Since you are planning to rent the condo, they might want some data on what the condo will realistically rent for. Hope this helps!
Let me know if I can help in any other ways.
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California Cool 4 Sale
Prudential California Realty
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