How To Buy A Second Home And Rent The First May 2026

Lenders typically view "departing residence" scenarios differently than standard purchases.

: Lenders generally want your total DTI (all monthly debts vs. gross income) to be below 43% to 45% . how to buy a second home and rent the first

: You will likely need "reserves"—liquid cash (often 6 months of payments for both homes) tucked away in a savings account to prove you can handle vacancies. : You will likely need "reserves"—liquid cash (often

: While you can get a primary residence loan for as little as 3.5%–5% down for the new home, having 20% equity in your first home is often required to avoid Private Mortgage Insurance (PMI) or to tap into equity for the new down payment. 🏠 Converting the First Home Before moving out, you must check for legal

: Some lenders allow you to use up to 75% of your first home's projected rental income to offset that mortgage payment, helping you qualify for the second loan.

Before moving out, you must check for legal and contractual hurdles. How to Buy a Second Home and Rent the First - HomeLight