What is the best loan option for this scenario? I own a residential property that I have a mortgage on & want to purchase a new home but keep this one as rental property. Is there a loan out there that can combine both mortgages into one payment?
There is no such animal for residential properties. In the commercial world that is possible. The advice I give to you would depend on a number of variables such as your current cash flow, tax bracket, and investment goals.
When investing in Real estate it is important to have a plan just as you should have a plan for retirement. In fact we would structure the debt against your real estate holdings to earn the highest rate of return and incorporate into overalll financial plan.
A good start would be to refinance your home and pull out enough cash so that the rental income covers the monthly payment and expenses. Also, you should finance as much as possible on the new home so that you take full advantage of the interest tax write off. Then use the excess cash to invest in tax deferred accounts that earn a rate of return.