Debt to Income Ratio - Landlord of multiple properties

[John T.]

Hey All,

I am having some trouble understanding how DTI is calculated and it seems that the different lenders I have talked to are telling me different information.

I have 1 year of landlord experience renting half my duplex and just filed my first schedule E in 2015. My schedule E shows rent income, and after expenses such as repairs, taxes, utilities, etc, I ended up with a net loss. Is this going to negatively affect my DTI?

Further, I am looking to purchase two more properties this month. Will my lender be able to use rental income from those properties when calculating the DTI in the loan approval process?

Thank you.

[Micah Dickson]

@John T. how are you keeping your books and accounting? I have 10 years of experience in banking and know that lenders love reporting that shows exactly what is going on in your finances. Your tax documents are just part of the story.

As for bankers not giving a straight answer, there is a lot more than just ratios that go into the lending decision. It is the risk appetite of the bank at that time and other factors as well.

Hope this helps.