I've been struggling to get approved for a loan because lenders were only counting one of my two full-time incomes for DTI. I recently consolidated to one job, working 72 hours/week, hoping that helps. I used all my savings to pay off credit cards and will start saving again in May. Based on 40 hrs/week (not the 72hrs I actually work), my DTI is around 36%. Credit score is 750+ and I make over 6 figures. Planning to house hack a duplex. Frustrating that I still can't get approved—any advice?
@Jennifer Patton The reason why the lenders/underwriters don't count for your 2nd full-time income/job is because for secondary employment or income, they need a whole full 2 years history of consistent income with no gaps. If you do have some gaps or just recently got the secondary employment/income, then that's probably why the underwriters don't count that income.
That says, there are a few options. First, let's try to increase your income by maximize the rental income for the other unit (as it's a Duplex). So you will have to do a 1007 Rental Appraisal to get that income calculated in. Second, try to ask your main employer to provide a letter stating the average hours you now work (which is 72 hours instead of traditional 40 hours/week). This way, the underwriter might be able to recalculate your income on the 72 hours work week basis instead of 40 hours. This might be able to boost your income to where it needs so that your DTI goes down to 36%. Let me know if that helps. And if you want my underwriter to look at your file that way, let me know, I will be available to help.
@Jennifer Patton The reason why the lenders/underwriters don't count for your 2nd full-time income/job is because for secondary employment or income, they need a whole full 2 years history of consistent income with no gaps. If you do have some gaps or just recently got the secondary employment/income, then that's probably why the underwriters don't count that income.
That says, there are a few options. First, let's try to increase your income by maximize the rental income for the other unit (as it's a Duplex). So you will have to do a 1007 Rental Appraisal to get that income calculated in. Second, try to ask your main employer to provide a letter stating the average hours you now work (which is 72 hours instead of traditional 40 hours/week). This way, the underwriter might be able to recalculate your income on the 72 hours work week basis instead of 40 hours. This might be able to boost your income to where it needs so that your DTI goes down to 36%. Let me know if that helps. And if you want my underwriter to look at your file that way, let me know, I will be available to help.
You’re doing a lot right, strong credit, solid income, and a smart house hack plan. The issue is most traditional lenders only count average verified hours over time, not recent overtime or multiple jobs unless it’s consistent for 2+ years. Now that you've consolidated and have a cleaner profile, you're actually in a better position for approval, especially with alternative or investor-friendly lenders who are more flexible on income.
A DSCR loan could also be an option if the property cash flows well, since those focus more on the rental income than your personal DTI.
Check out my profile and send me an email I would be happy to help.