Confused on income versus debt in terms of my income property.

You will not be able to find a 95% loan without mortgage insurance and the current mortgage on the duplex IS debt. Typically, the way a lender calculates your rental property income is one of two ways. If you have not owned it long enough to have filed taxes, including the Schedule E for rental property, then the lender will take 75% of the existing and proposed rent as the income, deduct your expenses and leave you with a Rental income that is positive or negative. So you would need to have the unit you are living in under contract with a lease of at least 6-months or longer and be able to document you have received the Security deposit and the first month's rent payment for the underwriter to consider it. If 75% of the rent you collect is less than your mortgage and other rental expenses, then the rent will only partially offset the expenses. You will also be required to have a cash (bank account) reserves to cover a certain number of months of payments on the rental at the close of escrow. ~ Bert Carpenter, The LoansA2z Team of NEXA Mortgage ~ NMLS 40586 ~ At NEXA, we've got you covered. We are licensed in all states except MA and NY and we are pending approval in VA, so give us a call. ~ www.ApplyYes.com 480-889-9000.

With 5% down, you can't "get away" from PMI. You can get a loan "without" PMI, but all the lender is going to do is hide the true cost of PMI into a higher interest rate. Its just a shell game. Under what cup are they hiding PMI - You will always pay somehow with 5% down. Next, YES, the existing house, even as an investment property is debt and calculated into your new home loan qualifying debt ratio. The lender will look at your Federal tax returns, Schedule E to see the details of the rental property. Depending on your numbers, it may help you qualify, be neutral, or hurt you. No lender can answer without a full review of your application. I lend in MN WI IA SD ND. Find me at FirstTimeHomeBuyer-MN.com - NMLS 274132