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Old 12-20-2010, 02:51 PM
 
Location: Atlanta, GA
15 posts, read 53,186 times
Reputation: 15

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I am wanting to move up/purchase a new primary home in the Atlanta area. I am not interested in selling my current home and plan to convert it into a rental property. What steps do I need to take and what do I need to consider when going this route? Will I need to be able to cover both mortgages when I get pre-approved for the new primary home even if my current home is being rented out? Has anyone gone through this recently?
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Old 12-20-2010, 03:46 PM
 
Location: Inman Park (Atlanta, GA)
21,870 posts, read 15,090,460 times
Reputation: 14327
Go talk to a lender, bank or a mortgage broker to see what you qualify to purchase. Your current residence is a liability since you are not earning any income on it.
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Old 12-20-2010, 04:05 PM
 
9,124 posts, read 36,388,885 times
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Typically, they're not going to count the rental income at all unless you've been a landlord in the past and can show that your past properties were cash-positive. Even if they do let you count rent as income for purposes of meeting your monthly debts, it'll likely be no more than 75% of the gross rent, to account for vacancies, repairs, etc. In other words, unless you've got enough income without the rental to cover both houses and all your other debt comfortably, your chances are pretty slim- it's the typical "we're more than happy to lend money to people who don't need the money" syndrome.
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