Debt to Income ratio

[Austin Walker]

Is debt to income ratio important when doing the Brrrr method?  Once you get a renter is that enough for the bank to refinance or is debt to income also considered?

I currently have my own home in my name and a HELOC, but also want to buy BRRRR properties. Will I have trouble getting more mortgages?

[Cameron Tope]

Originally posted by @Annchen Knodt:

I wanted to follow up on this thread since the DTI question is also looming large in my mind right now because I am looking to purchase a personal residence and concerned with how it will affect my ability to qualify for a cash-out refinance on a property I am in the process of BRRR-ing.

I've seen in a couple of places that lenders won't count rental income until after 2 years of the income being reported on your tax return, but @Cameron Tope and @Whitney Hutten, your responses here are encouraging me that it might not be too difficult to get that cash-out refi on this rental after getting a lease in place (even with new debt from this personal residence). The only other debt I have is a rental with a DSCR > 2, but I've had it for less than a year so I'm not sure if it will help or hurt me!

I'll ask my lender of course, but curious to hear any further details of your experiences.

Annchen,

Yes, I think you'll be ok to complete a cash-out. However, with all the changes recently with the covid, some banks are changing their policies to be more strict. I've actually heard of banks not doing mortgages anymore...

Nonetheless, I'm sure you'll find a bank to complete the cash-out after you get a tenant in place. It just may take calling a few other banks. 

Best of luck!