How to maximize DTI for new conventional mtge?

[Ryan Z.]

Hi BP - Hoping for some guidance here. I have 1 cash flowing rental property (FHA mtge as I used to live there) and I'm currently leasing the place where I live now. In the next few months, I'm hoping to buy and move into a property (with a conventional mortgage). Looking to optimize my income and expenses on my taxes as I know there are a broad range of options that are all in full compliance w/ standard tax code. My student loans are colossal and I have very very good credit. Put the whole package together and the banks have no problem approving me for a very small amount due to my high expenses for student loans in the DTI. The problem is, properties near me are a good 80k-100k above what I'm getting approved for.. I know for certain I have the income necessary, that is not a question.. I just have to figure out the proper way to work it out..

Last year I shot myself in the foot by declaring 'unreimbursed business expenses' that were actual expenses.  In retrospect, I would have preferred to not claim these expenses against my income and simply pay the higher tax bill, than to get a tax deduction and reduce my mortgage qualification amount by a decent amount.  Additionally, my rental was under renovation until April so I had a few months of vacancy which the underwriter counted against my income (rightfully so).

Now I'm finishing up 2014 taxes and I want to ensure I display everything (of course legally) in a way that maximizes the amount a conventional underwriter can approve.

Rental income

I know I cannot use any net income from rental towards my qualifying income.. ie: If my gross income for the rental is 50k and the debt service/taxes/ins only cost 20..  My understanding is that I'm no better off than if my gross income was exactly 20k.

W2 Income

Not real numbers but for argument sake:  Let's say I make 200k and I deposit 50k into a pre-tax 401k over 2014.  My gross income still counts for a mortgage qualification right?  ie: they won't say since I contributed 50k to a 401k, my income is 150k instead of 200k?

Expenses

Which expenses can I safely write off without it hurting my DTI ratio for an upcoming mortgage?

Anything I'm missing here?  Any input and advice I would appreciate it.

Thanks,

Ryan