Question about my debt-to-income ratio??

Question

My wife and I recently purchased a duplex "house-hack" together.  She had a short sale a few years back so we financed this through FHA.  I am looking into another deal with a partner on a SFR.  My gross yearly income is around 100K, my wife's is 90K, our mortgage is $4700 and we have a credit card with around a $150 monthly payment, no other debt.

My question is how will the lendor calculate MY debt-to-income ratio if only my name is on the loan, and only my income is included.  Also, we have only had the duplex for 3 months, rent coming is currently is $1650/month, can this be included in DIR?  Any info from lending professionals would be helpful.

Thanks!

Chris Mason · Answer

Hi @Michael Conway,

Assuming no overlays are at play, the rent can be counted right away.

Rental income from the property you are purchasing can also be counted, even if it is vacant.

Without running any numbers, I can surmise that aggressive use of rental income, as described here, will be key to making it work, because the PITI of the duplex you live in isn't going to be cut in half or anything like that.

A lot of lenders will want to see 2 years of landlord experience, or rental income appearing on tax returns, before they will count it. That would be a dealbreaker here, I suspect.

Chris Mason · Answer

Hi Michael,

Entire thing.

Michael Conway · Answer

Thanks @Chris Mason.  Would the entire existing mortgage debt typically be used against my personal DIR, or would this be a percentage based on the shared mortgage between my wife and I?