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Updated 10 months ago on . Most recent reply

User Stats

14
Posts
6
Votes
Andrew Broxterman
6
Votes |
14
Posts

DTI & Buying an Investment before Primary

Andrew Broxterman
Posted

I am looking to buy in Cincinnati with a partner in an LLC. A lender who gave us a pre-approval says with my income level, it is not wise to buy an investment property before a primary residence, as the lender on my future primary home will count only half the rental income and the whole investment mortgage in my DTI calculation.

My monthly income is $6,666, and my only current debt is a car payment of $315/month. The investment property would raise my monthly debt to around $1,550 for a DTI of 23%. With a max DTI of 50% for buying a primary, my max monthly payment on the primary would be $1,833, limiting my options. He also says my PMI and interest rate will be higher on my primary if I'm putting 3-5% down like I plan to.

What are your opinions on this? How do people get to 10, 20, even 30 doors working W-2 jobs like I am? Are there just lenders who will ignore your DTI, or only account for half the mortgage if investing with a partner?

A route I can, but don't prefer to take, is to put half down on the investment with a promissory note with my partner (property fully in his name initially), and transfer the property into our LLC after I buy a primary.

I greatly appreciate any help with this.

-Andrew

  • Andrew Broxterman
  • Most Popular Reply

    User Stats

    101
    Posts
    77
    Votes
    Brian Cauldwell
    • Lender
    • Springfield, MO
    77
    Votes |
    101
    Posts
    Brian Cauldwell
    • Lender
    • Springfield, MO
    Replied

    DSCR loans. The lenders we work with do not care about DTI. Credit score, and cash flow for the rental property are the primary factors.

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