If you are going to purchase an investment property, you want to make sure the rental income covers the mortgage payment. In addition, you should budget a cushion, i.e. rental income that more than covers your mortgage payment and gives you some profit each month. You can put the profit aside and keep it in a fund for repairs that may become necessary over time, or pocket it.
When lenders qualify you, they make the same considerations. They will take the market rental income as determined by the appraiser and use that amount to offset the mortgage debt. Thus, the payment is nullified for pre-qualification purposes. So, if your debt-to-income ratio is enough to cover your home, you will likely be able to get qualified for an investment property, provided you do not have much other debt.
We routinely qualify people for investment properties. We can help you with yours. Contact us.
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