Mortgage loans for high DI ratio

[Raj Kapur]

I am a new rental property owner. My primary and my current rental properties are causing my DI ratio to be more than 45%, so I am not able to qualify for additional mortgages from some conventional banks to buy more properties.

Are there any types of mortgages available that don’t consider DI ratios? If so, what criteria do they use?

Thanks

[Jay Hurst]

Quote from @Raj Kapur:

I am a new rental property owner. My primary and my current rental properties are causing my DI ratio to be more than 45%, so I am not able to qualify for additional mortgages from some conventional banks to buy more properties.

Are there any types of mortgages available that don’t consider DI ratios? If so, what criteria do they use?

Thanks

 @Raj Kapur   The first thing to make sure is that the LO who is telling your debt to income ratio is correct. It is VERY common to have LO's who just do not know how to calculate rental income from tax returns correctly. If you are buying cash flowing properties they should have very minimal if any negative effect on your debt to income ratio if calculated correctly. You can add back your paper loss of depreciation, and the expenses that are taken into account on your payment like property taxes, mortgage insurance,  and property insurance.  You use this worksheet to calculate:  Rental real estate worksheet  If you just leased the rental property you can use 75% of the lease. 

IF you really cannot qualify for a conventional loan you can use a Debt Service Coverage Ratio (DSCR) that only uses the rental income from the property you are buying and nothing else, so no tax returns, pay stubs etc. The con to this is rates AND upfront costs are higher then a conventional loan.