Going in for first Mortgage...

[Karmakarma777]

Hi Folks,

I'm looking to purchase my first house, and I'm about to start shopping around for mortgage.

I want to rent out a portion of my house .. (probably basement + another room) because the property is close to university.

So i'm wondering...

1. Do banks/brokers consider 'partially-rented properties' a favourable situation over just me living in the house?

2. Will they factor in the rental income into my 'maximum' mortgage amount at pre-approval?

Thanks in advance!

[bririp]

They will usually count 50% of the estimated rent towards your income.

[Hubster]

Hi Folks,

I'm looking to purchase my first house, and I'm about to start shopping around for mortgage.

I want to rent out a portion of my house .. (probably basement + another room) because the property is close to university.

So i'm wondering...

1. Do banks/brokers consider 'partially-rented properties' a favourable situation over just me living in the house?

2. Will they factor in the rental income into my 'maximum' mortgage amount at pre-approval?

Thanks in advance!


1. There are no "favourites". Banks, like us brokers, are simply going to need to see an arrangement that makes financial sense. No one reallty cares who your house guests are as long as the mortgage is getting repaid.

2. The lenders/insurers will want to see a lease agreement fom your renter. You may have to provide proof that it is a legally conforming suite (own entrance, hydro meter). You can then use from 50-75% of the rental income to bump up your own. The above can be very lender specific, so you need to know who is funding your mortgage.

[BillyParadise]

... and make sure you read the whole Smith Manoeuver thread before you choose a mortgage

http://www.redflagdeals.com/forums/showthread.php?t=150279&highlight=smith

[kramerz80]

I doubt any of the big banks would take into account the fact that you will have a renter in the basement... You'd probably have to go to a B lender to have that income included if you do need that to qualify for the mortgage.