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Old 01-02-2010, 01:19 PM
 
54 posts, read 146,453 times
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I am active duty military, and have orders to move. I currently own a home and would like to rent it out and purchase another home at my new duty station.

My credit is great- at 770, so I don't expect that to be an issue. I am an E-6 (make approximately $50,000 a year) with ten years in the military, so job history should be OK. I am married, but my husband makes very little money; however, he does have a high credit score as well.

I don't want to count on renting my house just to find out that banks won't allow me to mortgage a 2nd house, and wait too long to put it on the market to sell...

I did not use a VA Loan to purchase my 1st home, and am hoping that using it for the 2nd home will make it easier than trying to get a traditional mortgage.

Any advice?
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Old 01-02-2010, 01:32 PM
 
Location: Tempe, Arizona
4,511 posts, read 12,401,660 times
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You may also want to post this in the mortgage forum. Suggest also talking to some lenders in the new location.
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Old 01-02-2010, 02:22 PM
 
Location: Austin
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You really need to talk with a lender. There are more hoops to jump through with a VA loan than a conventional loan, and many lenders do not consider rental income on a first house as income anymore, so you might have to qualify for both complete mortgages and that might be tough on that salary. Only a mortgage person can tell you.
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Old 01-03-2010, 07:28 AM
 
589 posts, read 1,553,251 times
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I applied for a mortgage for a twin home with a long term (7-years) tenant on one side, and the lenders would not allow the tenant's rent to be counted as income. I also had to include maintenance and tax on my current property (a condo) and they would not allow potential rent on that property to count as income. I had to show I was able to maintain all three properties. They also wouldn't count equity in my (fully-paid-off) apartment as part of my assets. They wanted me to have enough money in the bank to maintain all three properties for six months in case of a job loss. An (untapped) home equity line of credit I have on my condo could not be figured in. They only counted mutual funds at 75%. They are really tough!

(And this is with good credit and 20% down)
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Old 01-03-2010, 09:21 AM
 
Location: Fayetteville, NC
1,490 posts, read 5,457,680 times
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Was in a situation similar to yours last year. I was retiring from the USAF was moving to a new town and had a home at the old base I wanted to rent. It was not a problem to get a new VA loan (I had a VA on my other house) I was still under the $417K VA loan cap (that has since been lifted). They did count 75% of my rental income. I did not qualify for very much with my retired pay alone (did not have the 2 years employment history on the new job) but with my wife's income we got the house we wanted.

Talk to a good lender. It is doable. Good Luck!
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Old 01-03-2010, 09:30 AM
 
845 posts, read 2,136,622 times
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Quote:
Originally Posted by Karen59 View Post
I applied for a mortgage for a twin home with a long term (7-years) tenant on one side, and the lenders would not allow the tenant's rent to be counted as income. I also had to include maintenance and tax on my current property (a condo) and they would not allow potential rent on that property to count as income. I had to show I was able to maintain all three properties. They also wouldn't count equity in my (fully-paid-off) apartment as part of my assets. They wanted me to have enough money in the bank to maintain all three properties for six months in case of a job loss. An (untapped) home equity line of credit I have on my condo could not be figured in. They only counted mutual funds at 75%. They are really tough!

(And this is with good credit and 20% down)

It's brutal out there. Another reason to low ball; no one can get financing.
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Old 01-04-2010, 01:23 PM
 
54 posts, read 146,453 times
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Thanks everyone! It's interesting that some people think this will be impossible, and some think it will be no problem. I'll have to talk to a lender, like many of you suggested.

Thanks everyone!
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Old 01-04-2010, 04:35 PM
 
589 posts, read 1,553,251 times
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Quote:
Originally Posted by househuntress View Post
Thanks everyone! It's interesting that some people think this will be impossible, and some think it will be no problem. I'll have to talk to a lender, like many of you suggested.

Thanks everyone!
You have to talk to a lender, and don't be discouraged by what I posted, because I only talked to one lender--and I was able to meet their strict criteria--it turns out that even though I need to maintain 3 properties, these are three exceedingly cheap properties. So I didn't argue or shop around, or look for a way around their rules--in other words, they approved the mortgage, so this is possible not impossible. And I don't make much more than you. The reason I am stalled now is that the inspection went badly.
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Old 01-04-2010, 10:33 PM
 
54 posts, read 146,453 times
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OK, well, I did get pre-approval through USAA, so that's encouraging! We will be limited in our budget, but the limit is about what we would have planned to spend anyway....

Just in case anyone is out there wondering the same thing as me, they did have to qualify us on both mortgages, not considering rental income. Rental income will be counted as income once we have had it long enough to claim the income on tax returns (I guess after we file our taxes for 2010).

However, since we were smart with our first mortgage, and kept it WELL within our budget, and no where near close to the max that we qualified for, we found out we qualified for twice what we borrowed. That leaves us enough leeway to obtain a second mortgage for an equally valued home. Lucky for us, the city we are moving too has a relatively similar cost of living when it comes to homes.

Now we just have to talk with some rental companies about fees and what we can charge. We will not be willing to take more than about a $100 or $200 loss each month, so we'll see.

We may end up selling anyway, but nice to have options!
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