Debt to income ratio

9 Replies

Curious to know if taking on a conventional loan with a partner will help my DTI for the next property I want to purchase. Is partnering with someone a good way to lower your debt to income ratio? Or will the lender automatically make all mortgage debt count towards my DTI?

Hi Brianna, you can typically add a co-borrower (even non-occupant co-borrower) and utilizes that co-borrowers assets, liabilities, income, etc to help get the deal done so it would then be a collective DTI, the whole payment would not count solely against your income.

Originally posted by @Dennis Folk :

Hi Brianna, you can typically add a co-borrower (even non-occupant co-borrower) and utilizes that co-borrowers assets, liabilities, income, etc to help get the deal done so it would then be a collective DTI, the whole payment would not count solely against your income.

Thanks for the reply. What about if I partner with someone for one property 50/50, then go to purchase another property solo...will the entire PITI from the first property count against my DTI for the 2nd property or only half? Let's assume I want to purchase the second property six months after the first property, so my rental income won't count as income.

Originally posted by @Brianna M. :

Curious to know if taking on a conventional loan with a partner will help my DTI for the next property I want to purchase. Is partnering with someone a good way to lower your debt to income ratio? Or will the lender automatically make all mortgage debt count towards my DTI?

Any payment that shows up on your credit report will count towards your Debt to Income ration. DTI really should be called Monthly Debt Payments to Monthly Income Ration. MDPTMIR. Let's see if that sticks :)

At any rate if you partner on a deal just know that in the future if you decide to go at it yourself, you'll need to qualify based on your own income.

I hope this helps and have a good one.

Originally posted by @Shaun Weekes :
Originally posted by @Brianna M.:

Curious to know if taking on a conventional loan with a partner will help my DTI for the next property I want to purchase. Is partnering with someone a good way to lower your debt to income ratio? Or will the lender automatically make all mortgage debt count towards my DTI?

Any payment that shows up on your credit report will count towards your Debt to Income ration. DTI really should be called Monthly Debt Payments to Monthly Income Ration. MDPTMIR. Let's see if that sticks :)

At any rate if you partner on a deal just know that in the future if you decide to go at it yourself, you'll need to qualify based on your own income.

I hope this helps and have a good one.

 Hmm...MDPTMIR isn't quite as catchy haha. Thanks for the reply. This is helpful.

Originally posted by @Brianna M. :
Originally posted by @Dennis Folk:

Hi Brianna, you can typically add a co-borrower (even non-occupant co-borrower) and utilizes that co-borrowers assets, liabilities, income, etc to help get the deal done so it would then be a collective DTI, the whole payment would not count solely against your income.

Thanks for the reply. What about if I partner with someone for one property 50/50, then go to purchase another property solo...will the entire PITI from the first property count against my DTI for the 2nd property or only half? Let's assume I want to purchase the second property six months after the first property, so my rental income won't count as income.

Typically yes, but you will also have some extra income from the rent-not all of that will be counted.  Best to talk to your bank.

Originally posted by @Brianna M. :
Originally posted by @Shaun Weekes:
Originally posted by @Brianna M.:

Curious to know if taking on a conventional loan with a partner will help my DTI for the next property I want to purchase. Is partnering with someone a good way to lower your debt to income ratio? Or will the lender automatically make all mortgage debt count towards my DTI?

Any payment that shows up on your credit report will count towards your Debt to Income ration. DTI really should be called Monthly Debt Payments to Monthly Income Ration. MDPTMIR. Let's see if that sticks :)

At any rate if you partner on a deal just know that in the future if you decide to go at it yourself, you'll need to qualify based on your own income.

I hope this helps and have a good one.

 Hmm...MDPTMIR isn't quite as catchy haha. Thanks for the reply. This is helpful.

 You're right I'll have to scrap that one...lol

Brianna that is a great question regarding a potential purchase on your own, after the 50/50 purchase with partner. Shaun Weekes would likely know much better then I as he is a lender.