Getting a mortgage with 30k W2 income

[Alex Silang]

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? 

[Stephanie P.]

Originally posted by @Alex Silang:

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? 

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