Debt/income

6 Replies

Any advice on my dti too high for using my fha for 3rd property.

55k a year income

House 1 gr- 2100 a month.. mortgage is 1550

House 2 gr- 1150 a month. Mortgage is 1200.. will be renting out other side for 1150 after purchase of new home.. total 2300.

Other debt. 685 a month for personal loan.

30k in retirement 

8k in bank.. am I in a position to buy again?

Thanks

Ryan

33 years old

If you've done well on your first primary from renting it out after your mandatory live-in requirement, you SHOULD have enough equity in it by now to be able to buy your next deal conventionally if you so choose (ie. cash out enough to have 20%+ down), and not even need to move!

And if you DO want to move, you probably should be looking for a 4-plex, so that you've got 3 other rents coming in too - hopefully negating all your mortgage and other property expenses!

I don't see that happening with either of the 2 houses you've quoted. I recommend: better deals!

I also recommend: get out of that personal loan debt ASAP! Time for a lifestyle audit? All the best...

@Ryan Keenan

It looks like you'll be cash flowing on all investment homes.  

Debt to income ratio I'll need more information like what your schedule E says on your 1040's.  Also depending on how long you've owned the investment homes it might make sense to refinance one of those homes take care of your personal debt.

Post more information or you can PM ME and I can analyze for you.

My first rental I've owned for 5 years and on my schedule e it's 24,900 for the year. Is that what your looking for.?

My current home I'm living in and renting the other side for 1150. I claimed only one month Lasth year because I bought it in December. After I file this year and judging by my income of 55000 and monthly debt of 685 not counting the mortgages ... would it be a long shot for me to qualify for a 3rd using my fha?  Greatly appreciate any advice!

Ryan

It depends on how you claim it and how the net income shows up on your tax return because thats what the lender will use. If there is no information is available we'll use 75% of gross - PITIA (prin/int/tax/ins/assessments).

We cant determine your DTI if we dont know how to calculate your rental income. I mean we could just use 75% of gross - PITIA for now but when you get your tax returns in on an application you might get a completely different answer.

It looks like your DTI will be low if you file both properties in a way that will net positive income from a lending point of view.

You'll have the ability to qualify for about 230k in loan approx assuming all rental properties "net zero," income from a qualification perspective (most conservative calculation).

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