I am not a mortgage broker but I would have to say that unless you have substantial wealth or some type of annuity set up from which you are drawing an income, I doubt very much a lending institution, in the current economic downturn, would be willing to provide you with a loan. The rental income may not be sufficient in and of itself.
If you are unemployed but are going back to work after taking your family leave, that may be a different story.
I would suggest calling a mortgage broker or go to your local bank to discuss same.
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The idea may be a good one, but in order to qualify for a mortgage, you would need to be the owner of the property first. Second, the property would need to appraise for enough to cover the cost of paying off the existing mortgage plus closing costs and still have enough equity in the property to satisfy the new lender. Third is that you would need excellent credit and sufficient income to support the mortgage payments. The chances are slim in the current economic environment that, based upon the facts as you have set them forth, that you would be able to be approved for a mortgage. If there is enough equity in the property and the reverse mortgage balance is small enough, you may be able to obtain a "hard money" loan from a lender other than a bank.
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