How Does Rental Income Help?  

If you are wondering about purchasing a rental property or a house with a suite that you will collect rental income with, you may be surprised on how lenders will calculate that.  Over the past couple years, lenders have eased up a little bit and are now allowing for more generous calculations of rental income.  Common questions that will determine the answer: 

• Purchasing a house to live in that has a rental suite as well?  If so, you can purchase with as little as 5% down payment and 1/2 the rental income will get added to your file.  If you can put 20% down or more, then you have a much more generous calculation that basically takes the rental income and deducts it from the mortgage payment, allowing people to qualify for much more. 
• If purchasing an investment property, you need minimum 20% down payment and the rental income again offsets the mortgage payments which is a much more generous calculation.  

The best thing to do is be pre-qualified by a mortgage professional to ensure you know exactly what purchase price you can go to.