DTI Question - Taxes and Insurance

[Account Closed]

Hi all,

I had a question regarding DTI. If I pay the property taxes and insurance myself on all my properties rather than escrowing them, will that lower my debt to income ratio? This is to the tune of $1,200 a month and could make a huge difference when I go to buy my next few properties in terms of how much I would qualify for.

Thanks!

[Jeff Shumway]

Definitely not. Lenders are required to take into account all expenses with the property, including principal, interest, taxes, and insurance (and HOA if applicable) when qualifying you for a property. Lenders legally have to abide by metrics to make sure you are able to repay the loan and giving you a loan you could not afford would spell serious trouble for the lender.