Over the past year, scores of people escaped to rural New Hampshire and ended up buying a second home. And then they rented out their first home back in the city. Can you do that? Can you get a mortgage to buy a second home and then rent out your first home? The answer is, yes, you can. There are a few ways of going about it, depending on what you have in savings and your debt ratio.
Scenario 1: You have savings and plenty of income to qualify. Simply use what savings you have to purchase the new home. You can rent out your old home once you’ve moved into the new one.
Scenario 2: You don’t have enough savings but plenty of income to qualify. Consider borrowing against your 401K or the equity in your current home to purchase the new home. Again, you can rent out your old home once you’ve moved into the new home.
Scenario 3: You don’t have enough income to qualify for your existing home and the new one at the same time. You’ll need to provide a signed lease from a tenant who will occupy your existing home right after the closing on the new home. This way we can use the rental income from your old home to help offset its mortgage payment to help you better qualify for the new home.
Scenario 3:) You’re strapped for savings and your income is not enough to qualify for mortgages on both properties. You’ll need to borrow against your existing home AND get a tenant for the existing home.
If you want to learn more about the financing options and about how much you may you qualify for, feel free to call me at 603-471-9300 or email me.