Proving my rental income so I can use it on debt to income ratio?

[Asher Anthes]

Hi guys here's my current situation:

I've had my first house for almost a year, I have friends that rent from me (boarders income I believe it's called, because I live in the house myself?).

Not factoring utilities my gross rental income is $1350 per month, PITI is $866, a net of $484 monthly.

My salary is $3000 a month

I also have approx $500 of side business profit per month (probably won't apply to my debt to income ratio).

I also have about $280 a month of student loans.

So, my question is, how can I use my rental income to let the bank give me a loan for a second house? They say I maxed out on my debt to income ratio, but I'm really taking home a lot more money at the end of each month than when I got approved for my first mortgage.

I've heard something about the bank allowing you to borrow extra if you have history landlording properties. Do I have to wait for 2 years tax return history to get this benefit?

Thanks for your help!

[Chris Calabrese]

I know my lender requires a signed lease agreement, but they don't require any history or proof of payments. They will use the income (actually 75% of it) immediately after the property is rented. Most banks will probably want more than that, at least copies of rent checks. Is it a big national bank or a local bank? The locals banks will probably be more flexible and work with you based on your history with them.

Do you have your boarders' leases documented or is it an informal arrangement? If they pay cash, issue receipts, and if they pay by check, make it a habit to make copies of their checks before you cash or deposit them. If you haven't filed your taxes yet, go ahead and get them in, so the bank can verify your return.