DTI and Living Expenses

[Brian Wilson]

Good Morning BP!

This year I'll be acquiring my first rental property as I'm finally in a financial position to do so. I have a 2 pronged question. I currently put all of my living expenses on a credit card (including rent) as the points returned allow me to travel for free (I have never paid a dollar of interest on a credit card in 5 years). My question is how does this factor into the evaluation process conducted by a lender prior to issuance of a conventional mortgage that is strictly an investment property? If I pay cash and then cash out refi into a conventional will my DTI go against me if the property is cash flowing?

While I know it will vary on a case by case basis and what my actual DTI ratio is, I'm just curious if anyone has any insights/advice. I'm trying to determine if I'll need to stop putting my rent on my CC 3 months prior to applying for financing or shifting around how I pay for my monthly living costs.

I know in commercial lending the asset is used for determination of loan issuance more than the individual purchasing the asset, being that residential is more about the purchaser I was curious to what extent my current debt handling would impact me.