DTI calculation - for conventional mortgages

[Aviv Berkovitch]

Hi everyone,

As I understand, every time that I purchase a rental property, after it rented, and I want to purchase the next property. The bank can take 75% from the income of the first property and if it covers the (monthly mortgage payment + property tax + property insurance) the DTI will reset to the first calculation and won't change cause the first rental property. Like that, I will have the option to take 10 mortgages with no changes in my other incomes.

Am I right with my assumptions?

Thanks

[Stephanie Medellin]

@Aviv Berkovitch The 75% calculation will be used for the property you're purchasing, along with any properties not yet reported on Schedule E. Once you file your taxes and report income for each property, your rental income or loss will be calculated off of schedule E. Depreciation, taxes, insurance, interest, and HOA fees (if applicable), will get added back to your net rental income. Then divide by 12 and deduct PITI. That's your income or loss for that property.