Trouble with Financing - House Hacking with a Duplex

[Dustin Hedrick]

Hi BP, 

I am running into an issue with our lender and am reaching out to see if anyone can give some advice. We finally found the perfect house hack opportunity after looking for half a year. The property would pay for our mortgage and most of our taxes through the other unit plus another studio detached garage that was on the property. We were able to put 30% down to make sure our mortgage was kept to the lowest rate possible, plus we still have reserves and were able to save for CapEx, maintenance, repairs, and vacancy.

When we went to put an offer in on the property, our lender said it was too much because of our debt-to-income ratio. My wife was a teacher and had to recently quit her job because of Covid and our son was born in May. I have been self-employed since 2009 and am always trying to write off as much as possible. Therefore, the debt-to-income ratio problem. 

Guess I am just a little frustrated because this seems like the most logical way to actually decrease our expenses, but our lender only looks at the price tag and not the income from the property. 

We have gone with a portfolio lender because of less restrictions on the debt-to-income ratio. 

Thanks for all your feedback!

Best,

Dustin