Boosting Your Buying Power: The Game-Changer of Rental Income

Thinking about buying your first home but unsure how far your budget will stretch? What if your future home could help pay for itself?

Let’s break down a side-by-side comparison of what you could qualify for—with and without rental income—and how it might open new doors (literally!).

💰 Scenario 1: No Rental Income

• Annual Employment Income: $80,000

• Maximum Purchase Price: $350,000

• Down Payment: $22,500

• Maximum Mortgage: $327,500

🏠 Scenario 2: With $1,800 in Monthly Rental Income

• Annual Employment Income: $80,000

• Rental Income Added: $21,600/year

• Maximum Purchase Price: $510,000

• Down Payment: $26,500

• Maximum Mortgage: $483,500

🔑 What This Means for You

Adding a legal rental suite to your purchase could increase your buying power by up to $160,000. That can mean more space, a better neighborhood, or getting into the market sooner.

And here’s the kicker: With a monthly mortgage payment of approximately $2,710.87, your rental income of $1,800 could reduce your out-of-pocket payment to just $910.87/month. That’s a serious step toward more affordable homeownership.

🛠 A Few Things to Note:

• The suite must be properly built—with a separate entrance and key amenities.

• You’ll need a signed lease agreement in place before closing. Otherwise, lenders may reduce the eligible rental income by 15%.

• First-time buyers may qualify for a 30-year amortization, which could further stretch purchasing power.

If you're curious about what numbers look like for your situation, or if you'd like help mapping out the path to a smarter first purchase—I'm here to help.

Let’s talk strategy and find the home that works for you and your financial future. 🏡

—Shawn Mooney, Mortgage Advisor