DTI

[Becca Summers]

My husband and I currently own 2 homes and have 3 years of rentals on our tax returns for the one home and we live in the other. 

What I'd like to ask is I'd like to buy two homes this year one for $170,000 that would rent for $1,350 and a new single family for my family for $435,000 and turing our current home into a rental that would rent for $1,400. Our W2 and 1099 income is 115,000. (This is averaging my last two Yeats of sales)

Mortgage 1 $190,000- rent $1,350

Mortgage 2 $170,000- rent $1,400

Mortgage 3 $170,000- Rent $1,350

Mortgage 4 $435,000 (we would put in a basement appartment later so no rent yet)

Would this work with our DTI?

[Bill Hamilton]

There are too many variables involved in this type of deal for anyone to give you a really good answer on here. You really need to take this to a good mortgage broker who can run the scenario through various underwriting systems to see what will fly. First, they need to run a full credit report to see what is showing as your monthly obligations. Second, you need a broker that is experienced in analyzing self employed deals. Many brokers are not overly comfortable with this and there are many nuances. In many cases your income from the 1099 side ends up being closer to your net income than your gross (even though from a W2 deal it uses gross) but there are add backs and subtractions. Also, Fannie and Freddie have different rule sets and they AUS (automated Underwriting Systems) will give and Accept/Eligible with different things i.e. the acceptable DTI can be very different from one system to the other depending on the level of liquid assets, credit profile etc. And @Chris Mason is correct. With a good lender/broker and some advice from your CPA you may be able to change your 1099 income profile to help your situation.