QUESTION: I currently own a home and want to buy another. I want to rent out my old home to a family member who’s ready to move in next month and will take over my current mortgage payments. Can I buy another home?
ANSWER: Not yet.
Courtesy of our good friend and great lender, Kevin Reiser of AmeriFirst Financial*, here’s the explanation.
“Buy and Bail” was a big problem for lenders in 2007 and 2008. Homeowners who knew they were facing financial troubles or were seriously underwater on their existing home would buy a new home on a new mortgage while their credit was still OK, then let the former home go into foreclosure.
Lenders caught on to this pretty quickly and now most have rules that say you must have “seasoning” on the rental income. In most cases, this means you must have proof that you’ve been receiving the rental income for at least 24 months and must have claimed that rental income on your taxes as well.
For more information, please email or call us. Or you can contact Kevin directly.
*You can reach Kevin Reiser by cell phone 480-289-7635 at or by email at kReiser@AmeriFirstLoan.com
Heather Barr is a Realtor and a happy workaholic. She eats more than someone her size ought to be able, and is a runner as a consequence. Her TiVo's full of spy thrillers, police procedurals and Whedonesque sci-fi.
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Heather,
Great info here. Yes…we used to be able to do the “buy and keep the other home just a bit longer thing” for our clients all the time…’til those underwriters realized what was going on. Shop for the new and Dump the old. Personally, I think it was essential for the guidelines to catch up. Now…IF the buyer can can qualify for both mortgages, they can still buy!! IF…that is…