My wife and I are currently saving for a home. We currently own a small condo, which we would like to keep as a rental unit once we purchase the second home. Currently our home costs are under 12% of our take home pay, so we would comfortably be able to afford both mortgages if we couldn't rent it out. Worst case scenario, we could sell the home if we cannot find a suitable renter.
Will we have any trouble getting a mortgage for a second home if we decide to keep this home?
Some more information
- We only have about 20% equity in our current home, but we would looking to put that amount down on the second home (from our cash on hand -- not from current home's equity).
- We have no revolving debt.
- We have one car payment. $320? I don't remember we pay $400.
- Current mortgage is $603.50 + $100 HOA. We should be cash flow positive on this property from day one according to going rates in our area.
- Next home will probably cap around 300K with 20% down, so ~240 - 250K mortgage on the top end. So it will all depend on interest rates then (we both have excellent credit).
- Current gross combined is ~11K / month.