My debt to income ratio is too high!

Saint Clair Shores, MI · Member since 2017 · 32 posts · 12 votes

Hello, I am new too REI and am having a hard time securing a loan. I am a server and only claimed 24k last year. I was looking to cash out refi my house and use the 25k to buy a duplex in full. I also have enough saved to try and get a baby mortgage but again not enough income. I am currently paying a PMI on my house and the cash out was going to actually lower my monthly payment. I don't want to wait until next year, after claiming more income, to get a property. Please any advice would be great.

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Curt DavisBusiness Member
Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
9y
I dont know what you actually make per year but by only claiming 24k, that alone makes it hard to get a loan. You also dont want to put yourself in a situation with lower income homes where the repairs or vacancy will hurt your personal financial situation.
Good luck
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Alex Roter
Lender · Thousand Oaks, CA · Member since 2016 · 4 posts · 0 votes
9y
Hi Nicholas,
If you cant wait until next year, you can get a stated income loan where no DTI (debt-to-income) analysis will be required. However, these loans are only offered on investment properties, so you cannot occupy the residence and must find a tenant to lease to.
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Jeff B.
Buy & Hold Owner · Redlands, CA · Member since 2015 · 5k+ posts · 2k+ votes
9y
Emotionally undesirable solution is to sell of the current home (killing off PITI & PMI) which will have positive impact on the DTI. Rent and save until you can get into at least a duplex which will help pay down the mortgage.
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