We are seeing a lot of borrowers lately who want to buy a new home before they sell their current home. These borrowers, however, often cannot qualify for a new home b/c of the debt against their current home, and they need to use the potential rental income from their current home to qualify.
Borrowers can only use the rental income from their current home or departing residence if: (1) they have a 30%** equity cushion in the departing residence; (2) they provide an executed lease; (3) they provide a copy of the renter’s check for the security deposit or first month’s rent; and (4) they provide a deposit slip, proving the rent check was deposited into their account.
**FHA only requires a 25% equity cushion.
Jay Voorhees
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 335646
