by demarco » Thu Feb 23, 2012 1:33 am
There are a lot of issues here.
First, you will NOT be able to get a 2nd FHA loan since you already have one in place on the first house. So this will limit the type of loan you will need. Talk with a lender about options.
Having the MIL apartment rented before settlement WILL not be used. You are trying to purchase as your primary home. I would in fact, forget this and not mention it to the lender.
Do you have any equity in the first house. In order to use the rental income from the first house to off set the mortgage, you need AT LEAST 30% equity in the first house. If you have less then 30%, your personal income will need to be large enough to carry BOTH mortgages. And by large enough, I mean per the ratios the bank uses, not what you think you can do. This would also be on top of other debt you would have (car, credit cards, etc)