Thread: 2 years of rental income history required?

Greetings,

I have been a real estate agent for over 25 years, I can tell you that you will need a detailed renting history of 2 years if you wish to carry a new mortgage on a new home. There are some other ways to qualify, depending on your lenders. One would be having the credit rating to qualify for the new home and the old home. This would mean you have to have the income to debt ratio to qualify as if you were buying both homes at once. I know here, some lenders will ONLY look at you in that light. They will not even consider the income from a rental. It's best to just speak to different lenders, as you will find, they can vary in what they offer. Hope this helped at least a little. Best of luck to you. Have a blessed day.

Best,
Susan Freeburg

Originally Posted by RdotGdot

Hi all, thanks in advance for any insight or assistance.

I currently own a very nice condo in an ultimately failed rental-to-ownership conversion project. The developer fled and claimed LLC bankruptcy when the market turned sour. Now the bank has foreclosed and sold out to a well-meaning rental management company. While I technically believe to not be underwater on my condo loan (bought for $208k, now owe $146, but Ann Arbor MI market is doing alright and location is very desirable), I still cannot sell because the mgmt company owns ~77% of the condo units, so no lender will issue financing for a prospective buyer (so I am told, is this correct?).

Now married and looking to start a family, we'd like to move into something bigger. I have no problem renting my condo, as it should at least break-even if not net a couple hundred bucks/mo. In the meantime we would rent something more affordable, saving money for a better down payment. However we'd still like to buy something bigger SOON. Do we really have to rent the condo for 2 full years before this income can be considered for obtaining a new loan? I have read this elsewhere on the web and am scared it may be true. This seems rather silly given how easy it will be to rent my unit and keep it occupied, but I understand a bank cannot simply take my word for that. Thanks!

I currently own a condo and have asked about renting out my condo and buying something new. I have already been pre-approved with NO rental history. I am currently living in the condo. All of the lenders I talked to said that you just have to be approved for both mortgages. You can go to various websites if you just google "How much house can I afford" and enter your data there. Include your condo mortgage payment as part of your monthly debts. But do not include any potential rental income. That will tell you basically how much you will be approved for on a new home if you keep your current home as a rental property.

Any income you want to have applied to the income you use to qualify for a loan will have to have a 2 year history.

The lender does not know how easy it is to rent out your condo and until you do it yourself for a couple of years you won't know for sure if it is a reliable source of income.