Skip to main content

Renting current home and buying a second home

Hey everyone,

My wife and I currently own and live in a condo in the Bay Area, CA. We just had our son this year and as a result have naturally wanted to start looking for a bigger home to accommodate him and future children. While we are looking for a new home to move into, we'd ideally like to keep this condo and rent it out. However, banks I have spoken to have said that rental income can only count against the first home's mortgage if I have a signed rental/lease agreement as well as security deposit, and possibly up to 3 months of rental income.

My question is about doing something that is maybe in the gray area of mortgage applications. Essentially I'm wondering if I could sign a lease with my sister-in-law to show the bank as well as any necessary rental income from the sister-in-law, without her actually living there in reality. That would then help to reduce the debt that is calculated against us when applying for a second mortgage, and allowing us to get a larger mortgage (closer to what we would get if we actually just sold this condo). This would also make it much easier to move directly from our home into a new home. It would be hard to actually find real renters to move in because we wouldn't have anywhere to live. Then once we actually do move out of the condo and into the new home, I could look for actual renters for the condo.

I am really not worried about getting stuck with two mortgages that we can't afford. With the Bay Area housing market, if we wanted to sell our current condo, it would be pretty easy to do. If we can't find any good renters, then it would be relatively easy to sell the condo. The main bottle neck is getting a bank to count rental income against the primary mortgage on the condo so we could qualify for the 2nd mortgage.

If this isn't achievable or is maybe too shady, then we'd probably just need to sell the condo first.

Appreciate any thoughts!

submitted by /u/brainlesswierdo
[link] [comments]

source https://www.reddit.com/r/RealEstate/comments/kmr85q/renting_current_home_and_buying_a_second_home/
Labels:

Comments

Post a Comment

Popular posts from this blog

Aren't comps/CMAs useless with buyer credits at close happening now?

I'm looking into buying a new construction townhouse in my HCOL US city. I'm seeing builders offering interest rate buydowns worth $20k-$60k on $800k homes (rather than just lowering prices) in order to keep their comps high for their other units, now that buyer demand has been declining. I asked my agent about these, and he said these buydowns aren't even the full story: buyers can write all kinds of other credits into an offer, like their closing costs, prepaid sewer fees, etc. Apparently cash buyers can just write in a "buyer credit at close" for any amount in their offer. So a new townhouse that appeared to sell for $800k in the MLS might have actually been a cash offer with a $100k+ buyer credit at close, meaning the buyer only spent $700k or less in total, but to the rest of the world they can only see the $800k! So that made me realize I can't trust comps/CMAs for other new construction townhouses. The sales prices could be way lower than they appear...
1 comment
Read more

How to Avoid Property Scams in Delhi?

Here’s What You Should Know! Commercial Real Estate (Non-Residential) Buying a property in Delhi can be tricky, especially with all the stories about scams and shady deals. If you're in the market, here are some tips to keep yourself safe:Double-check the documents: Always verify ownership and approvals. Don’t just take someone’s word for it—look at the actual papers. Do your homework on prices: Compare similar properties to avoid overpaying. A little research can save you from a bad deal. Work with trustworthy people: Whether it's a seller or an agent, go for someone who's transparent about pricing and the process. If they’re dodging questions, that’s a red flag. Ask for reviews or references: If someone you’re dealing with has a good track record, they won’t hesitate to share testimonials or connect you with previous clients. I’ve noticed that some property services have started focusing on things like verified listings and clear communication, which makes the whole proc...
Post a Comment
Read more