: Lenders generally want your total DTI (all monthly debts vs. gross income) to be below 43% to 45% .
: You will likely need "reserves"—liquid cash (often 6 months of payments for both homes) tucked away in a savings account to prove you can handle vacancies. how to buy a second home and rent the first
Buying a second home while keeping your first as a rental is a common way to build real estate wealth, but it requires careful financial balancing. You must prove you can handle both mortgages while preparing your first home for tenants. 🏦 Financing Your Second Home : Lenders generally want your total DTI (all
Before moving out, you must check for legal and contractual hurdles. How to Buy a Second Home and Rent the First - HomeLight Buying a second home while keeping your first
: Some lenders allow you to use up to 75% of your first home's projected rental income to offset that mortgage payment, helping you qualify for the second loan.
: While you can get a primary residence loan for as little as 3.5%–5% down for the new home, having 20% equity in your first home is often required to avoid Private Mortgage Insurance (PMI) or to tap into equity for the new down payment. 🏠 Converting the First Home
Lenders typically view "departing residence" scenarios differently than standard purchases.
