Now your monthly debt is consisted of any revolving credit card, installment, or auto loan that shows up at the time a company pulls your credit PLUS any monthly housing expenses. This includes taxes, insurance, and HOA (if applicable). What they would do is take your annual taxes and homeowners and divide it by 12. Because you and your husband own other properties, all of those properties' housing expenses will be needed to be included in your DTI calculation. HOWEVER since you guys get rental income, this can be used towards your income so it should offset some of those expenses.
At the end of the day, it's going to come down to if you qualify or not after somebody takes a look at your financial situation. I would recommend going to a bank or mortgage company for a pre-approval so this way you will know if you are able to purchase, and pre-approvals are free.
If the net rental income is positive it will be used as qualifying income. If the net rental income is negative its is treated as a liability when calculating the total expense ratio.
The full amount of the mortgage payment for the rental property (principal, interest, taxes, and insurance) is factored into the amount of the net rental income (or loss); therefore, it is not counted as a monthly obligation.
Ed Fallon NMLS 144708
Arlington Capital Mortgage
That's a very good question you've posed. Most of my professional background was spent in the mortgage industry, but I know that lending rules change everyday now. The last I had heard, if you want to count the rent as part of your income you will need to have a minimum equity position on each property (I believe it's around 20% - 30%).
If you have the minimum equity positions, valid leases, and an acceptable debt-to-income ratio, you should be able to purchase another home without any issues. If the Philadelphia property is going to be your primary residence, it will need to have a higher value than the CO properties you own in order to qualify for lower down payment options (Conventional, FHA, etc.); otherwise, they may consider it another investment. If the Philadelphia property is going to be another investment, you will probably need about 20% down (maybe more in today's lending environment).
Please let me know if you need a local mortgage contact and I will help.
Lots of luck to you!
Timothy M. Garrity | Brown McKinney Real Estate, Co.
Real Estate Professional & Consultant
firstname.lastname@example.org Email| http://www.brownmckinney.com/tim Website
215-825-2250 x 1007 Office | 267-879-2716 Mobile | 267-519-5490 Fax
the rental proeprties will be included as income offsetting mortgage liabilities. Usually 75% of the rental income is used as there are expenses associated with having investment properties.
If one of the properties you own currently has an FHA mortgage on it the lender on the new property wants to see 25% in your previous FHA financed home if applying for new FHA financing.
The lender will want to see leases and tax returns evidencing the rental properties in Colorado otherwise you cannot use the rental income to offset the liabilites.
If you have any other questions please feel free to call me.
Cornerstone lending Inc
Southampton pa 18966
Office 215 953 0800
Cell267 992 7276
You can keep the properties with no problem. We would just need to review your tax returns for the past two years to determine how you claimed those properties and then include the loss or profit into your Debt to income ratio to determine how much you can qualify for on the purchase of your new home. As long as they have both been rented and claimed that way on 2009 tax return, you would have no probelms at all. If not then a detailed analysis of when you made them rentals would have to be done to see if there are any other conditions that would apply.
Feel free to contact me to apply for a mortgage so you can know what you will be approved for, call me at 302610-906-3109 or send an e-mail to email@example.com.
John R. Thomas
Certified Mortgage Planner
Primary Residential Morgage
610-906-3109 PA Office
410-412-3319 MD Office
302-703-0727 DE Office
I have dealt with many instances such as this. As a matter of fact I own several properties and still I am able to obtain a Mortgage. The main point is to show the Lender income from each property and that will go towards you Earnings. I have an excellent Mortgage Lender I work with.
Please give me a call and we will discuss the details. I promise I will guide you through every step.
Advance Realty One
(267) 738 0886
James Yoakum - Realtor, SFR
Brown McKinney Real Estate
1631 W. Cabot St.
Philadelphia, PA 19121
office: 215-825-2250 x.1002
I recently have had buyers in that same sort of position. They were told by the lender that as long as they were putting 20% down on the house they were buying, and they had equity in the house they were going to rent out, they would qualify for another loan.
If they did not have equity in the house they were going to rent out, and/or were not going to put 20% down on the house they were purchasing, then they would have to qualify for their loan, and include the mortgage payments on the home they were going to rent out as part of their debt ratio.