What are some financing options?

[Justin Coleman]

Hello,

We purchased our first home in Milwaukee, WI a few years ago using a FHA loan but we are looking into moving to the DFW Texas area possibly next year. I considered keeping our current house in Milwaukee to turn into a rental to generate cash flow and obtaining another loan for a house in Texas.

1. What kind of loan options would be available already having an outstanding FHA loan?

2. How would my first loan affect obtaining the second loan for my primary residence? I’m assuming I would not qualify for the same amount on a second loan based off the debt of my original loan?

Sorry I do not have a great understanding yet but I am learning as I go. I’m interested in finding out if this is even a reasonable idea or if I should wait on obtaining a rental until I am settled in my primary residence.

Thanks for any input!

[Marcus Auerbach]

@Justin Coleman - your most likely limitiation will be your debt to income ratio, because you have to swing to mortgages before you have rental income from the old one. Most loans will go up to low 40% range.

Another tip: if TX is as competitive as Milwaukee, I would recommend a low down conventional loan over FHA. Seller's don't like the FHA inspection which often brings up exterior paint and you can't do that until spring!

I have a lender here in Milwaukee who can do 5% down no PMI on a 5 year adjustable. We use that a lot for house hacking or for buyers who want to improve and refi anyway. Thats another problem with FHA: PMI will never go away, no matter how much equity you have.