Debt to Income too high for conventional

[Eric Telese]

Hey all,

I just got a property under contract. It is going to be a primary residence. A few local credit unions have said that my debt to income ratio is too high to get approved for the loan amount I want. The reason is that I have a rental property in GA with a partner, and the full amount needs to be counted towards my expenses when calculating DTI, regardless of the fact it is making us profit. We have only owned the rental since January, so it will not reflect on my current tax returns. They can use leases, but since I own half of it, they will only use half the income against the full PITI payment.

The only other expense I have is a $190 car lease. The rental PITI is $950. Rental income is $2320/mo. Personal income is $78k. Proposed PITI on new property will be $2900 (including PMI).

At first glance, my DTI is going to be over 50%, which is too high for Fannie/Freddie guidelines. Are there any conventional lenders who are able to get more creative here? Should I be going to my local banks and shopping around trying to see if they can do something different? I feel like there has to be some way to prove that the rental is making great income then increase my income, while decreasing that rental mortgage expense. Are these guidelines super strict? Some lenders have been giving me different answers with how long they need the leases, if they need tax returns, etc.

I know there must be a way to get this done creatively without needing a co-signer and also not having to do FHA. Any help here is much appreciated!

[Jacob Sampson]

Yeah I agree with @Account Closed. And also, a little advice that you didn't ask for, but finance 101, don't lease a vehicle and don't buy more house than you can afford. My annual salary is slightly above 100k and my PITI is $1400 and I don't even like that.

Remember, spend as much as you can on things that earn you money (your rental) and as little as you can on things that cost you money (your house and car).