Brrrr from FHA and again

[Dillon Goral]

So I am a beginner and I have purchased my primary residence on an FHA loan about 3 years ago before I became interested in REI. I put 3.5 down, and after that started doing a bunch of updates that have created value (hidden bedroom/ half bath) before I had any idea they could be such good ideas. So now I need to refinance to get out of pmi, but I'm wondering how I can go about buying my second deal. Since it's me living here as my primary residence, there's no rental income. If I try to get another FHA loan, will the banks turn me down because of debt to income? The first house will be rent ready, just without a tenant in it and I'm afraid that if I buy another house I will get turned down simply because of the debt to income. Any experience with this?!

[Cameron Tope]

Originally posted by @Dillon Goral:

@Cameron Tope

You may be right about shooting the idea down, I wasn't sure how they would view it since there was no actual cash flow yet, would they consider that theoretical rent into DTI? Thanks for the help!

You would have to ask your lenders that question but in my experience you need at least a 12-month lease before they will give you income towards your DTI.

Don't create problems that don't exist. Go speak with the banks and see what they say. Most of them will be willing to help you get a loan - that's how they get paid!

Best of luck!