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[quote=Anonymous]With 2 kids, we are rapidly growing out of our 3 bedroom TH and would like to move to a SFH within the next year or two.  Rather than do the normal thing and sell our first home and put the equity toward buying our second home, we would like to hold on to our townhouse and rent it out.  We are a couple blocks away from the Ballston metro, so we believe the demand is there.  Also, based on rental rates in the neighborhood, we should be able to clear $1,200/month in excess of our mortgage payment (inclusive of taxes/insurance).  We think that the long term return on the rental exceeds the benefit of a lower mortgage on the second house, considering the current interest rate market.

So, we have enough saved to put 20-30% down on our new house, but I am worried about how lenders will view our first mortgage.  Will it make it harder for us to qualify for a mortgage on the second house?  Does it count against our debt to income ratio, or can they factor in the rental income on the first house as an offset?

Are there other issues that I should think about before we go down this path?  [/quote]

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