Before you move out and list your first home for rent, check your existing mortgage and insurance. How to Successfully Buy a Second Home and Rent the First
Buying a second home while renting out your first is a classic move for building long-term wealth, but it effectively turns you into a small business owner overnight. buying a second home and renting out the first
Expect to put down 10–25% for the new home. Lenders also often require 2–6 months of cash reserves to cover the mortgage payments for both properties in case of a vacancy. Before you move out and list your first
Lenders view a second mortgage as higher risk, so the criteria are typically stricter than for your first home. Lenders also often require 2–6 months of cash
Here is a full breakdown of what you need to know about the financing, legalities, and logistics of this transition.
Many lenders will allow you to use up to 75% of the projected rental income from your first home to help you qualify for the second mortgage. You may need a signed lease and security deposit in hand before closing. 2. Critical Rules for Your First Home