1st Investment Property Current Roadblock!! Need Help!!

[Jermaine HILL]

My wife and I are in the process of purchasing our first investment property! I feel like we have hit a roadblock.  We are currently going through the pre-approval process with a local credit union.  The bank does offer mortgage loans for investment purpose (Higher Interest rate) Since I am the one who has the not so good credit, my wife is using her information to apply for a mortgage loan.

We have already been through the process of going through a mortgage lender to get a  fannie mae homepath loan but was told my wife debt to icome ratio was 2 percentage poits over the required limit. 

The only liabilities she has is student loan and car payment which are fixed. The next biggest expense the bank takes into consideration is our $1170 rent.  

So before we continue with the pre-approval process with the local credit union we want to make sure there are potential other avenues we should consider, especially since we think the bank will tell us the same story of her debt to income ratio being above the required limit.

I have heard of peer to peer lending and hard money lenders which could be a viable options.  I would like to get some advice from people who have went through this process before.

My wife and I are only looking into the price range of up to $50,000 max for our 1st investment property. Our Net income is above the median national average, so we know we can afford it "together" its just she has to go on the application alone.  So its only looking at her gross income and not mine.

Any thoughts or advice?

[Jean Bolger]

Best scenario would be to pay off the car. Or, depending on how long she's been paying on the car it may be possible to refinance the car loan so the payment is lower. That may (or may not) be enough to make a difference, you'd have to do the math to see.

If you don't have enough liquid cash to pay off the car you might want to wait on the investment property until you have more cash stashed away. A lower priced property will almost always come with some expensive "surprises". You don't want to get caught out with a house that needs repairs to be rented and no funds to do the repairs...