How would lenders calculate my DTI?

[Sergey Pshenichkin]

Hello BP folks! I’m currently house hacking my 2 bed/2 bath condo. Unfortunately I’ve currently got a lot of CC debt from a business that didn’t work out, so I’m working on repaying that to rebuild my credit. My plan is to do a cash-out refinance on my condo and follow these steps:

1) Cash-out refinance out of my FHA loan into conventional.

2) Use cash from step 1 to pursue a new property, likely with an FHA 203k or homepath loan.

3) Move into and house hack the property from step 2.

4) Rent out the condo.

I’m mostly concerned about qualifying for the initial cash-out refinance because of my income/work history. I understand that the debt will be calculated using my current mortgage and car payment (hopefully all credit cards will be paid off before I apply, and I have no student loans/alimony/child support/medical debt/etc...).

In 2019 I had a retail job which gave me a w-2. I got another offer in a different field, which began in August 2019. I left the retail job in October of 2019 to focus on the new job, and was laid off from that due to the virus in March of this year. I’ve also been driving for Lyft and am currently collecting unemployment. I’m starting an e-commerce business hoping it will take off, and if it doesn’t I plan to keep driving for Lyft to keep income coming in.

My current roommates aren’t on a lease, but I do have invoices of their payment histories (both have been living here for over a year). Of course once I rent out the condo I will have leases for those tenants. I realize that I should probably have my current roommates on a written lease, I just haven’t actually gone and gotten one.

Given all this, what would I need to show a lender in order for them to qualify my income for a cashout refinance? I’m open to any feedback or suggestions. Thanks for the help everyone!