Quote:
Originally Posted by bank5
1. When I apply for a new mortgage will the banks treat the new mortgage as a primary home mortgage or a second home mortgage?
2. Will they require at least 20% for a down payment?
3. I'm only planning on renting my home if I can get a positive cash flow of ~$300/mo or if it increases my equity ~$500/month. Would you suggest more or would you be willing to settle for less?
4. What's a good way to check comparables? I've browsed craigslist but I'm wondering about other ways too.
5. What are the tax implications when you rent? The net profit each year goes to your income tax, and there's capital gains when you sell if you haven't lived in the house for at least 2 of the last 5 years, correct?
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I'll take a crack at it.
1. Depends on whether you will live in the new home. The bank has ways to verify if you actually moved in, so you do need to make up your mind about this.
2. Depends. You should speak with a loan officer, since the situation changes frequently. If you are treating the new home as your primary residence, and are counting on rent to cover the mortgage of your current home, you will need to provide a signed lease from a renter showing that income is indeed coming.
3. No opinion. When I rented out my house I only wanted to break even. It depends on your goals.
4.
Real Estate, Homes for Sale & Real Estate Values - Zillow,
Real Estate Listings, Homes for Sale and Rental Property Listings – REALTOR.com®, or the websites of prominent real estate companies in your area.
5. The rent you collect, minus any operating expenses, is taxable. There is also depreciation you can harvest, but the IRS wants it back when you sell. You also have to pay capital gains tax. I think they changed the 2 out of 5 year rule effective this year. You should check what the new rule is.