Debt to income ratio

Financing, Hard Money Lenders, Private Money
1

I have a mortgage in my name and it’s my primary residence.
Let’s say I’m looking to buy another house as investment property but my debt to income ratio is maxed. So I move in with Dad and pay him rent month and rent out my house to a tenant. Would that work?

2 
 I rented my house to a tenant and now I live in an apartment.  I qualified for another loan (according to my mortgage broker) as soon as the tenant signed the lease agreement.  He may be obtiaining this loan without regard to my rental income, though, because my debt to income is good, I have a downpayment and my FICO is in the 700 club.
 If I were you, I would take a good look at my credit, fix it if need be, work overtime at your job to maximize your income, and lower your overall debt (keep 5 credit accounts, just pay them down and pay them on time).
 I'm not really sure, but I believe that after a year, 75% of the rental income is added to your gross income when lenders are considering your loan.

good luck, dude

3

Thanks for your reply. I’m in the 700 club and my revolving debt is really low, maybe $1000 total on 4 or 5 credit cards.

My dad has an extra room and I thought about moving in with him for awhile so I could rent out my place and then purchase another place to rent out. I wasn’t sure what the lender would require. Just a copy of the lease?

4

You have some other moves here, sent you a message…

5

With a 700 score you can qualify for “no ratio” and “No income” programs.

6

Just to add in here with the other advice about your options - you do have several. Moving out may not be necessary to qualify. Although it may be best for your own personal goals, but only you would know that.

There are no ratio, no income, and no doc loans available. How much in liquid assets do you have? These funds need to have been in an account for the last 2 months.

7

Investment Loans,

I would prefer not to move out. I have $10K in the bank and they have been there for more then 2 months. I was looking to 100% with no pre pay fees.

8

Many loan officers would tell you to go “stated” and that would be loan fraud if you “stated” an income amount which is incorrect. There are plenty of no income disclosue or no ratio programs available to you with the credit and asset information you listed.

9

Thanks 4EEM for your help!

10

Patrick is absolutely right about the stated income program. This is something that is abused in our industry. Many brokers will mislead there client into a stated loan without them even knowing an illegal action has taken place.

If you don’t want to move out, then don’t. With your score and assets 100% should be possible. One thing that could potentially come up would be negative cash flow. Make sure you address this with the consultant doing your loan.

11

Thanks everyone! Now I just need to find the house!!

12

yes. remember you can only use 75% of the actual rent you are receiving as income. So if you mortage is $750 and you want to break even in the eyes of the lender, you need to be making $1,000 a month in rent. Good luck.