Guidelines you need to know about for those who have Residential Investment Properties in Colorado.

For those who want to take advantage of today’s Real Estate Market and turn your current primary residence into a rental and take advantage of the $6,500.00 tax credit while purchasing a new home  DO YOU QUALIFY Housing Tax credit There are some interesting rules for existing home owners.  Mainly you need to have lived in your current residence for 5 years or more and if your married that needs to be the both of you.  One of the new guidelines that can be a determining factor is, is that for the example of converting your primary residence and buying a new home is you are going to need to qualify with both payments. The way the lenders are looking at rental property is that they need to be reported on your schedule E of your tax return in order to use rental income (or loss) and they are going to use actual figures off your tax returns and there is the chance they could ask for 2 years tax returns and the they are going to average the 2 years income from those properties to determine the income or loss from that calculations. The number of years tax returns needed well be determined when the loan is underwritten through the Fannie Mae’s or Freddie Mac’s automated underwriting programs. Also another change is that they are going to want to see 6 months reserves for each property you have financed; example if you have 2 properties and each has a $1,200. dollar payment which includes PITI then you are going to 2 x 12oo x 6 = your going to need assets of at least 14,400. now if one of the properties has an HOA fee of 150.00 you are going to need to ad that to the amount of reserves, so keep that in mind as well.  But it’s all worth it to be able to tale advantage of today’s low rates. If you would like to apply go to my business website Capital Advantage Mortgage to apply or to contact me to see if your eligible for the program.

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