DTI Calculations PLEASE HELP

[Omar Jarrah]

I am having problems qualifying for mortgages and HELOCS. Everyone says my DTI is too high. I currently carry about 11k in mortgages and they are all covered with rents plus cash flow of about15%(this includes my primary residence, thanks house hacking), because of things all my properties have at least 40%+ equity. I have a great w2 job. When I calculate my DTI I am showing roughly 2 to 3% that is canceling out all my mortgages with rents and just using my w2. However, if I calculate the total rent plus w2 minus total mortgages I get a DTI of roughly 53%. How is DTI calculated when you have multiple properties how can I get access to my equity with affordable interest rates? How do BRRR when I cant even get more than 4 mortgages? I had the same issue buying my last property was hard to find anyone to refinance it into a mortgage. Yes, I claim all my rents and income on tax forms. Please help

[Alex Fenske]

I believe they (conforming loan underwriting guidelines) use 75% of gross rents to offset mortgage payments on rentals. Based on that, if you only have a 15% spread then your rentals are still dragging you down a bit.

I've found it much easier to work with a local commercial lender who can use more common sense in loan decisions since they'll be holding the loan instead of being forced to package it into the conforming loan guidelines. The rates are generally higher than on a conforming loan (although that's not the case at the moment, which is extremely odd), and you'll likely always have a shorter amortization and a balloon of maybe 5yrs, but it beats not getting a loan.