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Old 09-26-2013, 07:00 PM
 
4 posts, read 4,202 times
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Hello,

i Currently own a house valued at about 275,000. I have a 30yr loan @ 5.75%.
Balance left on the loan is 120,000. At the current pace, it will be paid off in about 6 years.

I would like to purchase another property and move but keep the 1st house to rent. I can cover the mortgage with the Rent i would get according to current rental rates in the area.

My Question is will it be hard getting a mortgage for a new house..... the new house asking price is 599,000. I can put down about 200,000 for it. Income for both me and spouse is appx $200,000.

Thanks in advance for all who respond.

Rob.
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Old 09-26-2013, 08:49 PM
 
Location: Mount Laurel
4,146 posts, read 8,393,376 times
Reputation: 3410
Hard to say without knowing your current mortgage payment and any other debt you have. At this point, they are not going to account for the potential rental income as it does not exist.
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Old 09-26-2013, 09:27 PM
 
4 posts, read 4,202 times
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Thank you for your response.

Current Debts are:

Mortgage: $1213.00 + $750 Taxes month
Car Payment $428 month

Assets :
Cash Available. $200,000
Investment Account $240,000
Retirement Account $200,000
Equity in first house $150,000

Thanks!
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Old 09-27-2013, 12:05 AM
 
Location: Southern California
4,350 posts, read 4,939,435 times
Reputation: 2129
Quote:
Originally Posted by Capital12 View Post
Thank you for your response.

Current Debts are:

Mortgage: $1213.00 + $750 Taxes month
Car Payment $428 month

Assets :
Cash Available. $200,000
Investment Account $240,000
Retirement Account $200,000
Equity in first house $150,000

Thanks!
Based on the fact that you have an owner occupied loan at 5.75%, I think you will find it hard. There must be a reason why you aren't at a 3.5% or lower rate, but at the same time you seemed disciplined enough to pay down the loan at a faster rate and save wisely. You can try to refi to bring your monthly obligation down. So my question is why haven't you refinanced?
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Old 09-27-2013, 01:03 AM
 
16,512 posts, read 17,561,528 times
Reputation: 23604
Would you be able to cover both house payments if a tenant moved and you couldn't find a renter for a few months? Have you looked at the ROI of the rental? If you can cover the rental payment when its not rented and you can use a percentage of the profit to pay towards the principal to pay it off faster to make it a paid off rental go for it.
On my rentals I have them each with their own account which is where everything gets paid from. Don't mix your personal account with the rental account
Good luck. You don't sound like you're a financial idiot so I think you'll be fine.
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Old 09-27-2013, 03:28 AM
 
Location: Rheinland-Pfalz, Germany
693 posts, read 924,498 times
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Seems like a no-brainer, your DTI can sustain both, easily.

You are also putting down over 30%.

Not even sure why you are asking here. Based on what you are posting, you have to be financially savvy enough with your income, investments and limited debt.

Contact a lender to begin your purchase.
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Old 09-27-2013, 07:28 AM
 
4 posts, read 4,202 times
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Quote:
Originally Posted by thelopez2 View Post
Based on the fact that you have an owner occupied loan at 5.75%, I think you will find it hard. There must be a reason why you aren't at a 3.5% or lower rate, but at the same time you seemed disciplined enough to pay down the loan at a faster rate and save wisely. You can try to refi to bring your monthly obligation down. So my question is why haven't you refinanced?
I have been paying an extra $300 a month in principle instead of refinancing. It didn't make sense in refinancing b/c my payment would drop less then the 300 i am currently adding to the payment. And i didn't want to go back to 360 more payments when i worked the balance down. I'm only 10 years into the 30 year loan and at the current rate, it will be paid off in 6 years.
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Old 09-27-2013, 07:29 AM
 
4 posts, read 4,202 times
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Quote:
Originally Posted by bavariantransplant View Post
Seems like a no-brainer, your DTI can sustain both, easily.

You are also putting down over 30%.

Not even sure why you are asking here. Based on what you are posting, you have to be financially savvy enough with your income, investments and limited debt.

Contact a lender to begin your purchase.
With all the restrictions and tight lending , that is why im asking.
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Old 09-27-2013, 07:40 AM
 
Location: Hot Springs, Arkansas
389 posts, read 951,480 times
Reputation: 443
I think you should refinance your current loan although you may have missed the train when they got down close to 3%. You are paying way more interest than you should be paying.

The rental situation is always something to be taken into consideration. We currently own two homes but the other house is being handled by a property management company. It can and should be an income producer. But it can be a pain if the tenants are not properly vetted.

From what you have told us, I think it is doable. I would check Zillow or some other source to see what the rent would approximate. It won't be exact but it will give you a good idea.
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Old 09-27-2013, 09:47 AM
 
16,512 posts, read 17,561,528 times
Reputation: 23604
Quote:
Originally Posted by rmissourimule View Post
I think you should refinance your current loan although you may have missed the train when they got down close to 3%. You are paying way more interest than you should be paying.

The rental situation is always something to be taken into consideration. We currently own two homes but the other house is being handled by a property management company. It can and should be an income producer. But it can be a pain if the tenants are not properly vetted.

From what you have told us, I think it is doable. I would check Zillow or some other source to see what the rent would approximate. It won't be exact but it will give you a good idea.

He's already saving more because he is paying extra to principal. Refi'ing now is pointless. Long term He's not paying anywhere near what the 5.75% rate should be returning for the bank.


Now if you are gonna rent it you can go two way
Stop the extra payment and take advantage of the deductions from the rental.
Keep paying extra to pay off rental and enjoy bigger cash flow when paid off.
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