You Can Still Buy a Home in Denver Even if Your Current Home Isn’t Selling
If you’re being relocated to the Denver Metro Area due to a job transfer or found new employment and want to buy a home, but can’t until your existing home sells or you are upside down on equity, this is the most exciting message you’ll ever read.
Here’s why:
The Federal Housing Administration (FHA) allows you to purchase when you are vacating your primary residence and are going purchase a new primary residence. FHA allows you to rent your existing property and use the money received to offset the existing housing payment. In order to do so, one of the following must exist:
Borrower is relocating with a new employer or being transferred by their current employer to an area that is not within a reasonable commuting distance (70 miles), rental income from their current primary residence may be considered.
In other words, if you can’t sell your existing property or you owe more than it is worth, you can rent the property out if you get a signed 12 month lease and have a security deposit check that you’ve cashed. You will need the following to make this happen
- Signed 12 month lease agreement (can be picked up at any office supply store)
- A copy of the security deposit check-front and back
- A copy of your bank statement (all pages) showing the deposit.
- Employment letter showing new job or transfer
For qualifying for a new mortgage payment, 75% of the gross rental income is used to offset the total mortgage payment. For example if your mortgage payment is $1,200 including principal, interest, taxes and homeowners insurance, and you collect $1,200 for rent. So $900 would offset the mortgage payment making the net amount of the debt to be $300 each month.
Rental Property Management
Whether or not renting your property was or is even on your radar, the reality is it isn’t as scary as it seems. Right in your local area are many property managers whose job is to find renters and manager your property. In fact, many real estate agents offer this service.
Their job is to find qualified individuals that can rent your property. They pull credit to verify no past evictions, perform a background check, and verify current and past employment as well as having the necessary funds before renting. They are on call 24 hours for emergencies; if something needs to be done to the property they find the necessary people to perform the service and do a drive-by of the property ever 30 days to check up on it. Property managers will help you set an appropriate rent and will collect the rent when it is due, take their portion (generally 10% of the rent) and send you the remainder.
Shawn Janusheske, Catalyst Lending, LLC
720-279-6351 Office
For information about mortgages or refinancing your home in Denver area visit Shawn’s website.
