Debt To Income Ratio
If you own multiple properties with mortgages, will this effect your debt to income ratio when applying for another property?
If you own multiple properties with mortgages, will this effect your debt to income ratio when applying for another property?
Most definitely! That is debt and it will be counted in the DTI.
The income from your properties is counted toward income in the ratio, as well.
The Income from your rental properties isn't always counted--especially for new investors. Many lenders require a min. 2 years previous rental management experience before they'll count your income--and some only count a percentage. I think it's a Fannie Mae thing, If I remember correctly. (Not sure, I'm an investor, not a lender!)
I ran into this when refinancing a newly purchased property--the lender didn't know about my prior landlord experience and thought they couldn't use the income on newly acquired properties to offset the deb. Just an FYI
The lenders I deal with only count 75% of the rents as income, this is supposed to offset any vacancies... So for example if you make $1,000 in rent every month - they will only count that as $750 each month...
FYI
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