Seeking advice regarding purchasing 2nd home

[Jonathan F.]

I was hoping to ask you all a money/real estate question. It has to do with buying a second home (primary residence).

Here's the scenario: I'm active duty military and currently live overseas. My wife and I own a home from our previous assignment. It has stayed consistently rented since we moved over here. It's been great and we have 3 years of documented/consistent rental income on the property. We have a rental management company and honestly it's been an outstanding experience. However, we bought near the real estate peak and with the past downturn in the market, it's considerably underwater (owe $188k; worth maybe $140k). As we prep to go back to the States this year, I'm trying to weigh rent vs. buy. Obviously that'll depend a lot on where we move, but I'm trying to prep for a scenario that we CAN afford a home there and we actually want a home there. Our first home is with a VA loan. I'm told that because we didn't take the full amount we could have for a VA loan ($417k), that I still have available funds through that program (roughly $217k remaining). There's a complicated formula that the VA uses to determine this but I believe I've done my math correctly. Obviously all of this depends on IF a lender decides we're worth the risk. My wife and I recently ran our credit reports and our middle scores are 824 (me) and 787 (wife). The only debts we have are the house ($188k) and my student loans ($110k @ 3.375%). Previously we'd been focusing hard on reducing those student loans and they've come down considerably in the last 4 years. However, with the pending move, I've paused paying the student loans to start building down payment money in case we decide to buy. Here is where I project we will stand by the time we move:

$60k cash

$50k Roth IRAs

$30k traditional IRA

$17k military Thrift Savings plan

Debt-to-income ratio: 29% with my yearly bonus factored in (bonus is always the same amount and is guaranteed)

Debt-to-income ratio: 33% without my yearly bonus factored in

We don’t want to touch the retirement funds but I understand they can be considered as “cash reserves”? Just like with the last home, my thought is we would like to live in it for 4 years and then, when we move again, rent it out.

I think my bottom line questions are as follows:

1.Is it even likely that a lender will give us a second loan?

2.Is it even worth the risk or is it more advisable to just rent this next assignment (4 years) and keep chugging away at the student loans? Why?

3.How should I be calculating my debt to income ratio considering I get a one-time yearly bonus? I’m assuming, because of the bonus, I should look at my gross YEARLY income and divide by 12 but just wanted to double check. Again, the bonus is a set amount and guaranteed.

Thanks! All opinions welcomed! Standing by to provide more info as needed.