Real Estate Investor · Sloughhouse, CA · Member since 2013 · 4 posts · 0 votes
Hello All,
How does everyone finance their investment properties? I was told by my lender that rents received are no longer credited on your debt to income ratio. In order for me to buy another property, my lender said I would need to be able to cover the payments for my two current mortgages as well as the new one on my D/I.
Is this true? If I have cash for a down payment I can't get a 3rd loan without qualifying for all 3 mortgage payments?
Real Estate Investor · Dallas, TX · Member since 2010 · 449 posts · 173 votes
13y
Hey Steve,
I believe so, for the most part. After you have two years worth of tax returns showing rental income, then at that point, lenders will consider that income. So it doesn't keep getting more difficult to achieve the required DTI, but there is that initial hump to get over.
Except what I hear is that it is not universal that lenders will not consider rental income right off the bat. I believe a few will if you present leases. So it may be worth calling around.
-Harry
SFR Investor · Watkinsville, GA · Member since 2011 · 83 posts · 33 votes
13y
As Brian Vanlandingham has pointed out, this is very lender and even underwriter specific. Typically the lender will use the rent after two years on your tax returns but even some of the bigger banks, not just community banks will use the lease as rent credit. If one says no, move on and find another who will.
Your best bet may be a local or community bank that may even keep the loan in house meaning the guy sitting across the desk from you will make the credit decision, not some underwriter in a cubicle in another part of the country. Hope that helps :)