How to Rent Your Current Home and Buy a Bigger Home

By
Mortgage and Lending with Fairway Independent Mortgage NMLS #196099
https://activerain.com/droplet/bJH

How to Rent Your Current Home and Buy a Bigger Home
So you are ready to buy a single family home in Virginia or Maryland, but you can't sell your current home...

Here's what you can do. You can rent your current home in the DC Metro Area for positive cashflow (in many cases). Look at this chart provided by Peggy James of Exit Realty. Due to BRAC in this area the rental market is moving at a brisk pace.


How will renting your home affect your mortgage qualification?
Simply stated, the monthly mortgage payment will be counted as a debt along
with the "new" mortgage payment. Obviously this will not work for everyone. But if you are a homeowner looking to move up and your current residence is underwater or you would prefer to rent the home, contact your FHA and VA Lender for custom mortgage solutions. We provided flexible solutions to help you buy your dream home.

Here's a quick example of a recent client scenario: Mr. and Mrs. Buyer purchased their townhouse in 2002 and have never been late on their current mortgage. They recognize the opportunity  to purchase their home in today's market with "discount" home prices and low mortgage rates. After review they could sell their townhouse and breakeven or they could rent their townhouse and wait on values to increase along with collecting positive cash flow on a monthly basis.

Mr. and Mrs. Buyer will not get credit for the monthly rental amount on "paper". They will carry the current mortgage payment in the qualifying numbers, but still are able to buy the home of their dreams.

If you have good credit and income you can purchase your dream home while renting your current home. Your single family home is just a phone call away. Contact Markita Aldridge-Woods at (703)497-3936 to create your financial roadmap to your dream home in Virginia or Maryland.

Weststar Mortgage is located in Woodbridge, VA. We are local and accountable. Our underwriters (decision makers) are in the building. What this means for you is if you need flexibility or are a little outside the box, we can help.

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. C. Lloyd McKenzie 06/11/2011 10:35 AM
Topic:
Home Buying
Groups:
Military Relocations
VIRGINIA
Local Expert
Responsible Mortgage Lenders
Women And Their Business Hear The Roar
Tags:
home for rent
move up buyers
rent guidelines

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Rainmaker
167,844
Reba Haas
Team Reba of RE/MAX Metro Eastside www.TeamReba.com - Bellevue, WA
Team Reba, CDPE

People just need to remember that if they can't sell their current home and they choose to go this route then they'll need to qualify at both levels but with roughly only a 75% amount of any rent going toward offsetting the debt-to-income ratios for them. Plus, they'll have to have a renter already lined up to make it work in most markets.

Jun 01, 2011 09:54 AM #1
Rainmaker
144,599
Markita Woods NMLS#196099
Fairway Independent Mortgage - Woodbridge, VA
Queen of Mortgages - FHA, VA, Conventional, USDA

Hi Reba: Actually the 75% threshold along with having a renter lined up does not count for the qualification since we are most likely counting the full payment in the debt to income ratios. But of course for a seamless transition having the renter in place is important.

Jun 01, 2011 10:04 AM #2
Rainmaker
1,223,722
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Markita:  You and Peggy work well in tandem to provide much food for thought.  It's definitely worth checking out, should you hope to "move up" in homes.  Just proves that there are creative options to talk and think over with your professional lender ...  I applaud that concept!

Gene 

Jun 01, 2011 12:00 PM #3
Rainmaker
144,599
Markita Woods NMLS#196099
Fairway Independent Mortgage - Woodbridge, VA
Queen of Mortgages - FHA, VA, Conventional, USDA

Thanks Gene! Your insight is always welcome.

Jun 01, 2011 12:37 PM #4
Rainmaker
528,758
Peggy James
EXIT Realty Associates - Woodbridge, VA
Woodbridge Virginia Area Real Estate Specialist

Hi Markita, thank you for including me in on this blog post. Just this morning I met with another Lake Ridge Virginia town home owner who has owned for ten years. They have outgrown the townhome and are looking forward to buying a move-up home. In this case they already have a pre-approval letter for $400,000 without selling their current town house. When I crunched the numbers for them, they will actually have a $350 positive cash flow above and beyond the mortgage payment and HOA dues on the townhouse.  In my conversation with them, I have prepared them it could take as long as 45 days for them to rent the town house. So here is another example of a town home owner who is able to take advantage of today's real estate market conditions.

Jun 02, 2011 05:46 AM #5
Rainmaker
508,942
C. Lloyd McKenzie
Albuquerque, NM
Living Albuquerque

Markita...This is a very creative spin on Rent vs Buy

Jun 11, 2011 10:26 AM #6
Rainmaker
839,374
David Popoff
DMK Real Estate - Darien, CT
Realtor®,SRS, Green ~ Fairfield County, Ct

Hmmm, I would say every situation is different but you have to remember this is a tricky scenario, you have to have enough of an income and equity to pull this off, remember banks only count an average of 75% of yearly rent to payments and don't forget about taxes, insurance, repair and maintenance issues. good luck it willl be an option for some.

Jun 11, 2011 11:18 AM #7
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Rainmaker
144,599

Markita Woods NMLS#196099

Queen of Mortgages - FHA, VA, Conventional, USDA
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