So I am planning on applying for a mortgage in the next 6 months. I currently own three properties. One is a house that is valued at $101K and I have a mortgage on it for about $55K. I do not live in the house but couldn't pass up buying it for $15K in 2008. I put some money into it so it is probably worth more the the original $101K.
The second and third is just land that are valued at about $40K total that I own free and clear.
I have a few questions regarding these properties and the mortgage process.
1. Does owning properties free and clear help or hurt my chances to get approved for another mortgage? Does it look like assets or something?
2. What is the best option I can do with the house I own and want to keep? Should I convert it to a rental property? I already have someone who wants to rent it. Does this help the situation?
I contacted the local CU but they were more interested in trying to get me to let them run my credit and "pre-approve" me then they were trying to answer my questions.
Any opinions would be appreciated.
Thank you
Will owning property hurt my chances for another mortgage?
Started by
sparky256DSL
, Apr 23 2012 08:09 PM
3 replies to this topic
#1
Posted 23 April 2012 - 08:09 PM
#2
Posted 23 April 2012 - 09:15 PM
Don't see a problem here. As long as you qualify otherwise this should be a standard mortgage application. Some lenders will have a problem if you own more than 10 properties. You can rent out the property you mentioned. Be sure and go over the guidelines with your lender about how to treat rental income on your application. If you are buying another property to claim as your homestead just make sure it's worth more than your rental properties.
#3
Brian B The Loan Professor
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Posted 23 April 2012 - 09:35 PM
The debt will count against you like a credit card or car payment - you cannot use rental income to offset the debt until you have been a landlord for a minimum of two years and can document the income through taxes
The only other way it may impact you is if it is an FHA loan and you wanted to buy with FHA (or VA-VA or USDA -USDA)
With all of those programs you can only have one loan at a time with some very rare exceptions.
If it is conventional then you should be fine
B
The only other way it may impact you is if it is an FHA loan and you wanted to buy with FHA (or VA-VA or USDA -USDA)
With all of those programs you can only have one loan at a time with some very rare exceptions.
If it is conventional then you should be fine
B
#4
Posted 23 April 2012 - 10:26 PM
Thanks for the responses.
Brian, I was hoping there wasn't some kind of stipulation like two years of being a landlord. But I figured there would be.
Thanks again!
Brian, I was hoping there wasn't some kind of stipulation like two years of being a landlord. But I figured there would be.
Thanks again!
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