Debt to Income Question
First, here is the situation - I'm looking to purchase another investment property. Though I haven't settled on one yet, the high-end is likely to be $300k. To get there, I'd do 1031 exchange from an existing house that I have, which would net me about $150k. Therefore, I'd need to finance the remaining $150k. I've begun calling lenders to try to determine the best rates. At one lender, he indicated that my debt-to-income ratio is too high, since I currently have three loans (primary residence and two investment properties, one of which I'd sell and 1031).
My income is fairly high, and due to a job change, it's recently increased $20k. So, I was surprised to hear that my ratio was too high (52%), especially given the fact that I'd be exchanging one loan for another... and the new one would actually be a lower amount. My question is this... How do investors get around this issue? Am I looking at the wrong loans?
Ryan
Most Popular Reply
the rental income for present and future rental income can be counted to a certain degree ...so this should make your dti ratio lower ......in most cases rental properties will cash flow positively or at least break even from a lenders qualifying perspective ...fyi - lenders will use your schedule E for analyzing rental income for properties owned for more than 1 year