It’s become a common theme…. You went ahead and graduated college, started doing your own laundry, got a half decent job and bought a house that was going to be your ‘starter home’. Well the years have passed and you’re getting tired of trying to cram guests into your living/dining/family room. You also just got a raise and/or found someone way richer than you to marry so it’s time to start looking for one of those awesome houses you constantly see while you binge watch HGTV. You know.. the ones with the stainless steel appliances and the back porch you could ‘see yourself drinking coffee on’.
Unfortunately after years of paying down your mortgage you’re lucky to be breaking even with your equity. Now you’re stuck! If you want to buy a new house there are really only two options: Option one is to SELL your current home, which means you’ll need to bring God knows how much to the settlement table forcing you to eat up money that could be used towards a new place. The other option is to RENT your current home, which seems like a perfect solution right? Wrong! For years Mortgage Companies required you to have more than 30% equity in your current residence in order to count any of that rental income despite having a renter ready to go, having a lease signed, etc. Many of my buyers were forced to either stay put or worse yet… compromise by purchasing a new home for far less than they otherwise would qualify for if they didn’t have to afford BOTH mortgages.
So what’s different?! Well the bottom line is we don’t care about your equity anymore and will allow you to rent your current home in order to qualify for a new one. Let’s take our same couple and their ‘starter home’, which has a mortgage payment of $1,500 by the way. They talk to their Realtor and find out that they can rent their place for $1,700 and cover ALL of their housing expenses while making a little extra. Sweet! Then they talk to their loan officer (me, hopefully) who can now use that money to offset their current mortgage payment and start their house search without having to carry two mortgages.
If you think this applies to you or if your eyes started to glaze over halfway through this and you just want to see what you would qualify for feel free to CLICK HERE and I’ll be in touch shortly to review your options. Thanks for reading and feel free to share with your friends!