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Updated almost 9 years ago,

User Stats

172
Posts
66
Votes
Gloria Mirza
  • Real Estate Agent
  • San Jose, CA
66
Votes |
172
Posts

DTI and carry over depreciation

Gloria Mirza
  • Real Estate Agent
  • San Jose, CA
Posted

I have done some research and everything I read says that Depreciation is factored out from the expenses that they count against rental income, which makes sense.  Here is the problem I'm seeing though, it seems that my lender is counting carry over expenses from last year as expenses that bring down my gross rental income.  I came to this conclusion by reverse engineering the way they calculate rental income on a fannie mae 1003 form.  

All of my carry over expense are due to depreciation, so it seems like I'm stuck with my expenses and in turn my DTI increasing every year as I carry over more and more depreciation expenses.

If my DTI drops too low will I be able to talk to the conventional loan lender and explain that the cary over expenses are due to depreciation?

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