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amybweber · Joined: 20 Oct 2009 Posts: 2 1.54 Dollars($)

We have a two bedroom condo that we would have to sell at such a loss that we would have no money left to buy something new. We are able to rent it out and cover all of the mortgage and taxes. We have called around and it seems that even with a two year lease we cannot get a mortgage for a new home. We have 20-30% to put down on something new . We put 10% down on our current place that we have lived in for three years. So far everyone has told us you need to have 30% equity in your current home or have a massive bank account over our 20-30% to get another mortgage. Are there any ways around this? Are there any banks that will look at our good credit and consider it?

gmakerley · Posted: Tue Oct 20, 2009 11:01 am Post subject:

amy, it all comes down to what your debt ratios are. if you need to include your rental income in order to qualify for a new mortgage, then you'll find it extremely difficult. all the fraud that took place topped with all the liberal interpretations that were used in calculating income - and the consequences of these two things (and many more) caused everyone to look at the rental income of a newly-vacated home in a much different light.

the 30% rule (equity in the existing home) is very true, and this will hold. your other qualifications won't mean much of anything if you need the rental income to qualify. it's hard to accept, i know; but the lenders learned some hard lessons and they've adjusted accordingly. those adjustments hurt folk like you. look for a community bank or credit union that might have more liberal policies (in other words, a portfolio lender). you might squeeze through that way.

amybweber · Joined: 20 Oct 2009 Posts: 2 1.54 Dollars($)

That is exactly what I was looking for.. My husband technically makes enough that his paycheck would cover two mortgages but with other expenses the big lenders will only give us a small second mortgage which is not much of a help! I will check out some of the local banks and credit unions, you never know!

gmakerley · Posted: Tue Oct 20, 2009 11:17 am Post subject:

i am happy to be of service...i wish you well, amy.

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Can we get a second mortgage if we rent our home and buy a new one?