How to Rent Your Current Home and Buy a Bigger Home

How to Rent Your Current Home and Buy a Bigger Home
So you are ready to buy a single family home in Virginia or Maryland, but you can't sell your current home...

Here's what you can do. You can rent your current home in the DC Metro Area for positive cashflow (in many cases). Look at this chart provided by Peggy James of Exit Realty. Due to BRAC in this area the rental market is moving at a brisk pace.

How will renting your home affect your mortgage qualification?
Simply stated, the monthly mortgage payment will be counted as a debt along
with the "new" mortgage payment. Obviously this will not work for everyone. But if you are a homeowner looking to move up and your current residence is underwater or you would prefer to rent the home, contact your FHA and VA Lender for custom mortgage solutions. We provided flexible solutions to help you buy your dream home.

Here's a quick example of a recent client scenario: Mr. and Mrs. Buyer purchased their townhouse in 2002 and have never been late on their current mortgage. They recognize the opportunity  to purchase their home in today's market with "discount" home prices and low mortgage rates. After review they could sell their townhouse and breakeven or they could rent their townhouse and wait on values to increase along with collecting positive cash flow on a monthly basis.

Mr. and Mrs. Buyer will not get credit for the monthly rental amount on "paper". They will carry the current mortgage payment in the qualifying numbers, but still are able to buy the home of their dreams.

If you have good credit and income you can purchase your dream home while renting your current home. Your single family home is just a phone call away. Contact Markita Aldridge-Woods at (703)497-3936 to create your financial roadmap to your dream home in Virginia or Maryland.

Weststar Mortgage is located in Woodbridge, VA. We are local and accountable. Our underwriters (decision makers) are in the building. What this means for you is if you need flexibility or are a little outside the box, we can help.

Contact Markita Aldridge-Woods at (703) 929-2274 or via email for custom tailored mortgage solutions.

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Comment balloon 7 commentsMarkita Woods NMLS#196099 • June 01 2011 04:32PM


People just need to remember that if they can't sell their current home and they choose to go this route then they'll need to qualify at both levels but with roughly only a 75% amount of any rent going toward offsetting the debt-to-income ratios for them. Plus, they'll have to have a renter already lined up to make it work in most markets.

Posted by Reba Haas, Team Reba, CDPE (Team Reba of RE/MAX Metro Eastside over 8 years ago

Hi Reba: Actually the 75% threshold along with having a renter lined up does not count for the qualification since we are most likely counting the full payment in the debt to income ratios. But of course for a seamless transition having the renter in place is important.

Posted by Markita Woods NMLS#196099, Queen of Mortgages - FHA, VA, Conventional, USDA (Fairway Independent Mortgage) over 8 years ago

Markita:  You and Peggy work well in tandem to provide much food for thought.  It's definitely worth checking out, should you hope to "move up" in homes.  Just proves that there are creative options to talk and think over with your professional lender ...  I applaud that concept!


Posted by Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi, 708.921.6331 - 40+ yrs experience (NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656) over 8 years ago

Thanks Gene! Your insight is always welcome.

Posted by Markita Woods NMLS#196099, Queen of Mortgages - FHA, VA, Conventional, USDA (Fairway Independent Mortgage) over 8 years ago

Hi Markita, thank you for including me in on this blog post. Just this morning I met with another Lake Ridge Virginia town home owner who has owned for ten years. They have outgrown the townhome and are looking forward to buying a move-up home. In this case they already have a pre-approval letter for $400,000 without selling their current town house. When I crunched the numbers for them, they will actually have a $350 positive cash flow above and beyond the mortgage payment and HOA dues on the townhouse.  In my conversation with them, I have prepared them it could take as long as 45 days for them to rent the town house. So here is another example of a town home owner who is able to take advantage of today's real estate market conditions.

Posted by Peggy James, Woodbridge Virginia Area Real Estate Specialist (EXIT Realty Associates) over 8 years ago

Markita...This is a very creative spin on Rent vs Buy

Posted by C. Lloyd McKenzie, Living Albuquerque over 8 years ago

Hmmm, I would say every situation is different but you have to remember this is a tricky scenario, you have to have enough of an income and equity to pull this off, remember banks only count an average of 75% of yearly rent to payments and don't forget about taxes, insurance, repair and maintenance issues. good luck it willl be an option for some.

Posted by David Popoff, Realtor®,SRS, Green ~ Fairfield County, Ct (DMK Real Estate ) over 8 years ago