Buyer qualifies using rental income for condo purchase

Mortgage banker: Dave Stambone

Home value: $ 467,000 Loan amount: $ 453,100

Property type: Condo, owneroccupied purchase in Stamford

Loan terms: Conventional 30 year- fixed with 4.625 percent and no points

Backstory: A buyer was referred to Stambone by her real estate agent to discuss financing options for a potential home purchase. She currently owned a small condominium in Danbury and obtained a job promotion that required her to commute to New York City.

While excited about her new position and increase in income, she was concerned about the longer commute and how it may affect her quality of life.

Stambone arranged a time to speak with the buyer on a Saturday morning to discuss her plans. She wanted to increase the size of her home, but moving closer to work remained paramount.

However, the buyer was confused on how she may qualify for a larger, higher priced condo. She purchased her current residence in 2010, and unfortunately had limited equity since the collapse of the housing market.

The buyer was opposed to a short sale ( the process of selling a home for less what one may owe) because it would prevent her from purchasing a new home for at least three years.

In addition, the buyer thought that she could not rent her home, and use the income for qualifying for the new condo purchase. She was told by her bank she either had to have 30 percent equity or a two year history being a landlord.

Recently, lending requirements have changed. Stambone and his bank were able to qualify the buyer for a home purchase, and were able to use 75 percent of the gross rental income from her departing residence.

She needed to show a signed lease agreement, cleared checks for the first month’s rent and one month security deposit.

Furthermore, the buyer liked the idea of holding on to her condo as a long term investment. In approximately 20 years, she will own the unit free and clear where she may then sell and apply the money earned toward retirement or a college education for children, etc.

Finally, Stambone obtained her a mortgage, and she was able to upsize into a larger, luxurious condo closer to work.