Depreciation affect of DTI
Hi everyone! I have a great W2 income and paid off house. Aplied to increase my HELOC with Truist but was denied due to high DTI. It was high because of my 4 rental properties. Bank counted depreciation as a loss against my W2 gross income and counted 4 mortgages as my personal liability. In reality, all properties cash flow and pay for themselves. They are not using FNMA cash flow calculations. They said I would have qualified for 500k LOC if it was not for rentals😂. Anyone with similar situation? Anyone can recommend investor friendly bank? Any input appreciated!
Most Popular Reply
Hi Lilia, that's a frustrating but common wall with the big banks. Truist and most national lenders run everyone through the same DTI grid and depreciation gets treated as a red flag rather than the tax benefit it actually is. I'd skip the nationals and look at local credit unions or community banks that portfolio their own loans, since they can underwrite on the property's actual cash flow instead of a rigid personal ratio. A mortgage broker who specializes in investors can usually point you to which local banks do portfolios.