Overcoming Debt to Income Ratio Problems

[Patrick Chafe]

Hi Everyone,

I am running into a problem with DTI. I live in Massachusetts and the cost of real estate is quite high. There are still a lot of good deals that will cash flow, however the barrier to entry is a significant amount of debt. I currently own a home(primary residence) that i rent out bedrooms in. I am looking to get another property, either SFR or multi, and rent out my current house but my mortgage lender is already talking about being maxed out for DTI with the next property purchase(SFR). It may differ if my next purchase is a multi, but it got me thinking/worried about maxing out DTI this early/new to REI.

Just want to make sure i take the right steps now to not get bound up in the future.

Any advice or experiences with overcoming DTI would be a great help.

Thanks,

[Jaysen Medhurst]

After 2 years, most lenders will count your rental income, @Patrick Chafe. Another option is to consider commercial financing, which is more interested in the deal, then your DTI. The trade-off is less favorable terms.

Also worth asking where they want to see your DTI in order to qualify for your next mortgage. You can work to bring down your debt, if that's feasible.