Here are the four things you need to do in order to buy a second home and rent out your first.
Step Number One is down payment. How much down payment do you have available for the new home purchase? If you have a lot of equity in your existing home, there are two ways you can access that equity. You can refinance or get a secured line of credit on your first home.
Step Number Two is financing. Talk to your mortgage broker or bank to figure out how much you can qualify for based on the existing equity in your home as well as what you can rent your current home for. They will take these numbers into account when calculating your mortgage qualification.
Step Number Three is reality check. Sometimes we get caught up in how much of a house we can afford. What is the maximum mortgage we can qualify for? We have to think about the cost of living once we get into the new home. Keep that in mind when you figure out your financial qualification as well as the down payment for the new purchase.
Step Number Four is property search. Once you have figured out your down payment, your financial qualification, and what you really are comfortable with, then you can have a focused property search to find your home.
Feel free to connect if you have any questions.