Debt to income ratio lower if I rent instead of Mortage?

[Chris K.]

Hi everyone,

I currently have a mortgage on my primary residence.

If I were to sell and instead rent a home (even if rent is similar amount as mortgage plus annual property tax), does this make it better for my debt to income ratio to apply for a mortgage on an investment property ?

[Kenneth Garrett]

@Chris K.

There is no benefit in this case. You have debt either way. If DTI is your issue, you can use commercial loans where DTI is not calculated into the approval process. Property must cash flow, you'll need DSCR of 1.25, need to own it in a LLC or other entity. Rates are higher about 4.50% or so. I use small local lenders. They are easier to work with then the large banks.