Exceeded My Debt To Income Ratio With Mortgages
I am looking to buy another property but with two mortgages totaling over 360k my broker says I would be at 56%. Im looking to finance another 245k with a 95% LTV. What are some ways I can do this?
Thanks for your advice :-o
Hello Clayman,
The way I was able to get around this sticky matter. I found a rehab property, applied for a construction loan (which allowed the money to purchase as well as complete the rehab work). Once the work was completed I applied for primary loan to cover the purchase. Because my LTV was 75% of the appraised value I end-up with a no money down deal. It is much easier to get a 75% LTV than applying for a 95% LTV mortgage.
I guess what I am telling you Clayman, it to look harder for better deals. Once you locate the right deal, that DTI will not really matter too much. The mortgage company will be much happier knowing that they have 25% or so in a property just in case you go belly-up (smile).
Is your mortgage broker accounting for the future income (from rent) from the properties or just the future debt? Most will add 75% of the income of the property to your personal income to adjust the ratios.
You can always buy creativly rather than conventionally as well.
They did include rent @ 75%. This is a single family in good condition so rehab deal wont work. The deal is a family member that needs to cash out so im locked into the house.
Thanks for the responses
Is there any income associated with the 360k worth of mortgages? If so, are they counting the 75% of that? If there's any way to refi on those guys, and lower your payments, you need to look at something along those lines to lower your DTI.
yes there is income which is being counted. I guess what I was woundering is how do those investors who have more than a few properties deal with this issue as I have a total of 3 properties all with cash flow thai I am interested in but the DTI issue is stopping me.
How do they get several loans on rental property?
They are buying properties that produce positive cash flow using 75% of the rent. Example
rent $800 per month.
Mortgage $700 per month.
To a lender this property produces positive cash flow and helps your DTI.
Rent less than $700 per month and lenders see negative cash flow.
[ Edited by lacashman on Date 03/29/2004 ]
You could look into the possibility of No Ratio loans. On these they do not compute the dti ratio. However, I don't think you will be able to get many lenders to do this @ 95% on an investment property.
These are the possible reasons your debt ratio is not working:
1) your credit card balances and payments are too high
2) co-signing for someone
3) a new car purchase
4) decrease in pay
If you use your primary job to base your everyday living on. There usually is no problem with the number of investment properties and Mtgs. you can have. As long as there is positive cash flow in the properties.
Lori
[addsig]
If your credit is excellent (680 for O.O 720 for N.O.)get a stated income or NINA loan.
Goodluck!