Bank does not consider rental income for loan

[April Laspinas]

Hi all! I'm looking to purchase my first rental property (second mortgage); However, on confirming with our bank, they do not consider future rental income from the property on their assessment. We currently have our first mortgage for our primary home with them. Is this normal for banks? As far as I know they should be considering a portion of the future rental income at least? Thank you!

[Charles Carillo]

@April Laspinas

You are getting a second mortgage on your primary residence in order to invest into a rental property? In my experience, they are not going to use the potential income from a rental property (you do not own yet) towards qualifying you for a second mortgage on your primary residence. When you are purchasing rental properties, especially 5+ unit apartment buildings, you can utilize the income towards qualifying for the mortgage (on that property). (Of course, you can do portfolio loans that utilize income from all of the properties towards the loan but that is not what we are talking about here.)