Can anyone recommend lenders who count income from house hacking in the their DTI calculations for refinancing the primary residence it happens in?
I’ve been successfully house hacking for the past year, renting out my three spare bedrooms and occupying the fourth, allowing me to live for free since the rent covers my mortgage and utilities. And I used to landlord other properties since 2013.
Now I need to look at refinancing due to divorce. But in talking to lenders, I learned they don't accept rent from spare rooms because it's in my primary residence, the reasoning behind which I don't understanding since that's an extra $2650/month in addition to my W-2 income. And with anticipated child support added in, just counting my W-2 income alone raises my DTI too high to qualify with all my debts total.
So does anyone know of any lenders who would count that spare bedroom income in my DTI for refinancing?
What you mention above about your lender doesn't jive with my understanding of the standard regulations. Typically, conventional lenders will not count rental income until you have two tax returns reflecting that income. At that point, they give you credit for 75% of the rents to account for vacancy and capex. Your lender might have their own criteria, but most banks will generally use those guidelines that I've mentioned. If you've been a landlord of your own properties since 2013, you should be able to get credit for 75% of your rental income as long as you can provide leases to your bank. If they won't talk to another bank, you'll find one fairly easily I would think. Good luck!