Second home purchase and DTI

[Christopher Arter]

I bought my first home with an FHA loan. It was a modest 157k house, but I only make about 43k a year, plus I have about 26k in student loans and a 14k car loan, so my DTI is pretty tapped (I'm undoing and re-educated myself on personal finance). I want to buy another home and rent out my first home. I know lenders won't consider the projected income of my rental of my house for my DTI, so I'm sort of stuck.

Are my only options to wait, chip away at my student loans for a few more years? I Does Brandon's Low & No Money Down address getting around the DTI issue when trying to buy the second (first investment) home? Or is it time to start thinking about creative financing & sweat equity kind of partnerships?

[Chris Mason]

Originally posted by @Christopher Arter:

I want to buy another home and rent out my first home. I know lenders won't consider the projected income of my rental of my house for my DTI, so I'm sort of stuck.

We're allowed to use rental income from the departing residence to offset the PITI of that home in the mortgage math. Time to dial for dollars until you find a REI friendly lender local to the state where there property you are buying is.

It'll be conventional with 95% LTV, or lower if you have a larger down payment and want a better deal on the financing.