How to use rental income to qualify for new mortgage

[Janee Gibson]

Hello,

I currently rent out a single family home (15 months so far) for $1250 per month and I live with my fiance rent free. I am looking to purchase another single family house to use as my primary residence. Currently my mortgage payment on the house I rent is $700 (PITI) which means I make a profit of $550 per month. How do I qualify for a new mortgage? I make 2,500 per month gross from my job. I am trying to figure out how to calculate the DTI using my rental property. My only debt is $220 student loan payment and the $700 mortgage payment.
If I use 75 percent of the rental income that is $937 (1250x75%) minus the 700 mortgage payment, is a profit of $237. Is that added to my 2500 work income?
The total PITI mortgage of the house I want to buy is $850 per month. I am trying to understand if I Would I qualify for this home?

From my calculations I would add the $237 net profit from the rental income to my 2500 work income for a total monthly income of $2737. Then I would add the mortgage of the house I want to purchase (850) plus my student loan debt of $220 together for a total of $1070. I would then divide the $1070 by my monthly income of $2737 which equals 39% DTI which means I should qualify since it is less that 43%. Is this math done correctly?

Thank you for your time,

Janee Gibson