Leasing a new car (Conventional DTI Concerns)

[Brian Garrett]

So I decided to sell my luxury car in order to free up more capital for real estate deals.

I couldn't justify having a lot of cash tied up in an expensive vehicle anymore knowing I could be investing that money.

I currently have no wheels so I obviously need to replace the car I just sold with something more economical ASAP.

Here's where I could use some input/advice particularly from you mortgage brokers and conventional lenders:

I'm self employed (10+ years) but my tax returns show low income due to business expenses and write offs.

Although my net income shows low on paper I have zero debt, Tier 1 credit and a healthy amount of cash on hand.

Technically my DTI is still okay (per Fannie/Freddie guidelines) since I have literally no debt of any kind reported.

With that being said I'm afraid if I go lease a new vehicle, even if it's something cheap, it may impact my DTI just enough to affect me being able to qualify for conventional Fannie/Freddie loans since there would be debt reported then.

Right now I'm actively looking for a conventional Fannie/Freddie lender to work with for acquisitions and cash out refinances. I'd hate to go lease a new car this week only to find out I can no longer qualify because of the lease. 

Would it be wiser to buy something cash again (but cheap this time) to stay debt free and not take the chance of negatively impacting my DTI any further since my income already shows low as it is?

Thanks in advance and if you need further information and/or specific numbers please feel free to message me!

[Kyle J.]

If your income is "low on paper", you have a "healthy amount of cash on hand", and your primarily concerned with your DTI and future borrowing ability, then there is no scenario where leasing a car would be better than buying one outright with cash.