HELOC/Refi/DTI

[Andrew Peters]

What has been people's experience when trying to complete a refinance, does the bank include the income from the investment property towards your income?  Is there any seasoning period before they will?

[Albert Bui]

Originally posted by @Brie Schmidt:

@Andrew Peters

@Albert Bui did a loan for my brother in NC - He works with investors.

If it is a new purchase and not on your tax returns they will use 75% of rent - PITI

If it has been on your taxes for a full year (usually) they will use a net rental income calculator like this:

https://www.biggerpockets.com/files/user/chicagobr...

Hey Brie, 

Good to hear from you again thought you took a year off from REI.

Yes rental income on prospective rental properties can be used on purchases (75% of gross - PITIA).  In most cases if you find a good enough deal the formula comes out to be net positive and helps you out even more. It's important to note that market income can be used on purchases even the unit is not physically occupied.  

On refinances, you actually have to have tenants or leases in place to use rental income. This may be important to note if you're trying to complete a BRRRR.

Let me know if that helps.