Get 6 tips to buy a new home and keep the old one as a rental property.
Tip #6: Get a Mortgage Preapproval
It’s never too early to meet with a lender for a free consultation about whether you can afford to buy a new home and keep the old one as a rental. Always get a mortgage preapproval before you start shopping for your first or second home.
Lenders can give you a preapproval letter after they review and verify your financial information. It shows the maximum amount you can borrow for a certain period of time. However, remember that you shouldn’t borrow the maximum amount if it would be a stretch for your budget and overall financial goals.
Not only does a mortgage preapproval help you shop for homes in the right price range, but it’s an excellent negotiating tool. A preapproved buyer is more attractive to a seller who might be willing to take a lower offer than a higher one that’s contingent upon financing.
Once you confirm that you can turn your home into a rental, have a realistic expectation of its annual cost, and get preapproval to buy a second home, you’re on your way to becoming a real estate investor.
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