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Let Your Tenant Pay Your Mortgage!
_Home buyers can find the housing market to be so prohibitively expensive that swinging a monthly mortgage payment is almost impossible to do.
One solution for strapped home buyers is to consider a two family home to live in and to charge enough rent where the rental payment covers the mortgage payment.
Is this a good idea for you?
Let's explore the concept of buying a two family home and letting your tenant pay your entire mortgage.
For the record: your tenant's rental payment cannot go directly to your mortgage lender.
You will still have to collect your tenant's rent, process the check, and then forward the right amount of money each month. If your tenant fails to pay you or she is late making a payment then you will still be responsible for paying on a mortgage that is in your name, not your tenant's.
A two family home can be advantageous and some lenders will take rental income into consideration when you buy a home. So, that $485,000 two family could easily be approved while the $395,000 single family home could be out of your reach. It all depends on just how much weight a lender will give to a tenant's income in deciding whether to extend a loan to you or not.
Here are some other points for you to consider before seeking financing for a two family home:
Should a paying tenant already be in place and you plan on occupying the second apartment, then your chances of securing that two family home is better than if both apartments are presently vacant.
Although it would be ideal to have the tenant's entire rent cover your mortgage payment this may not be possible in an area where rents are generally low.
You won't be able to increase your tenant's rent to cover the cost of your mortgage, otherwise he could move elsewhere.
Consider this: it is better to have a rock solid tenant paying a reasonable rent than to have a flighty tenant or tenants unable or unwilling to pay a rent that is above the market average.
If your tenant-landlord relationship turns sour you could find trouble brewing for you.
A later paying tenant cannot be easily evicted in some states, thus you could be left holding the bag for payments that are six or twelve months behind. Can you take that loss or will it push you over the edge financially?
Yes, securing a mortgage is generally easier to attain with a tenant already in place. A faithful tenant can help you out, but a troublesome tenant could easily bankrupt you.
One solution for strapped home buyers is to consider a two family home to live in and to charge enough rent where the rental payment covers the mortgage payment.
Is this a good idea for you?
Let's explore the concept of buying a two family home and letting your tenant pay your entire mortgage.
For the record: your tenant's rental payment cannot go directly to your mortgage lender.
You will still have to collect your tenant's rent, process the check, and then forward the right amount of money each month. If your tenant fails to pay you or she is late making a payment then you will still be responsible for paying on a mortgage that is in your name, not your tenant's.
A two family home can be advantageous and some lenders will take rental income into consideration when you buy a home. So, that $485,000 two family could easily be approved while the $395,000 single family home could be out of your reach. It all depends on just how much weight a lender will give to a tenant's income in deciding whether to extend a loan to you or not.
Here are some other points for you to consider before seeking financing for a two family home:
Should a paying tenant already be in place and you plan on occupying the second apartment, then your chances of securing that two family home is better than if both apartments are presently vacant.
Although it would be ideal to have the tenant's entire rent cover your mortgage payment this may not be possible in an area where rents are generally low.
You won't be able to increase your tenant's rent to cover the cost of your mortgage, otherwise he could move elsewhere.
Consider this: it is better to have a rock solid tenant paying a reasonable rent than to have a flighty tenant or tenants unable or unwilling to pay a rent that is above the market average.
If your tenant-landlord relationship turns sour you could find trouble brewing for you.
A later paying tenant cannot be easily evicted in some states, thus you could be left holding the bag for payments that are six or twelve months behind. Can you take that loss or will it push you over the edge financially?
Yes, securing a mortgage is generally easier to attain with a tenant already in place. A faithful tenant can help you out, but a troublesome tenant could easily bankrupt you.