Does the Math make sense? How should I do this?
I currently own a villa in Deerfield Beach, FL (near Fort Lauderdale). I paid 50K for it over 10 years ago. Currently I have about 150K of equity in the home. I re-financed about 6 years ago so my interest rate is at 5.0% on a 15 year loan. The mortgage including taxes and insurance right now is about $750 a month.
We are thinking about moving to a larger house with a purchase price around 300K. With the market, it is really tough to sell. I would like to keep my current house and rent it out. I’m seeing rental prices around the area is about $1250 a month.
Presuming I can get that amount, what’s the best way for me to manage my equity so I can buy the new house. Idealy I would like to break even on my rental house after taking the equity out to buy the new house.
Any help or creative financing ideas are appreciated. I would like to hear about different types of loans and is it possible to combine the houses into one mortgage. Does it make sense? Thanks!
You can’t combine the houses into one mortgage. As for the way a mortgage company will look at this, you can’t use rental income to wash out the mortgage payment unless you have 2 years documentation of being a landlord. Tax returns showing rental income. Then you can only use 75% of the rental income- due to people moving out, maintanence issues etc. So basically you will need to qualify based on 2 mortgage payments is what I’m getting at. “Creative” financing no longer exsists.
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