Getting a mortgage with 30k W2 income
This is my financial situation:
30k income
Rental property (I own):
4k monthly rent
1.5k/mo PITI
Want to buy:
350k-400k property
4k monthly rent
I've used online calculators (for what they're worth) and they say I qualify. Also, another mortgage broker showed me how to calculate DTI ratio and I pass.
However, I emailed a mortgage broker recently and he said "not a sure thing". Is he just trying to cover himself, or am I at high risk of getting rejected? Is there something as I'm missing?
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Here's the bad and the good.
The bad:
You don't qualify to buy that property using conventional financing. Your income and the property's income won't support the debt.
The good:
You can get a loan with a mortgage broker/lender that does no income verification loans. They are readily available.
Back to the bad:
You won't get Fannie Mae rates or terms. No income verification is a much riskier loan, so it's priced accordingly. Where a 30 year fixed for an investor property may be priced at 5.5% (I'm guessing there, but a 300K loan would cost 1703 principal and interest), you may be able to get a 30 year fixed on a 1-4 unit property at 6.99%. or $1994 principal and interest for the same amount.
...and finally, more Good:
Is it higher? Yes. Do they close? Absolutely they close and while you're not getting the lowest rate possible, you're still grossing about $1500 per month. I'd take that rather than lose the deal.
Stephanie