Will lender consider my plan as DTI?
I purchased a single family home in 2021 and is my primary home. I plan to have it rented and buy another primary home. If ever I close a deal with a tenant will my underwriter consider the rental income to offset my DTI? I don't understand how this works. TIA! by Rana8 from Detroit, Michigan. Dec 14th 2022
Joe Metzler (JoeMetzler)
#17 ranked lender in Minnesota - 4,848 contributions
When converting your existing primary home into a rental, and purchasing a new primary home, lenders will use 75% of documented rent on your new rental. For example, if rent is $1,000 - we will give you $750 income off that property for qualifying income on the new home. This is only in the first year of a new rental. Once the rental is on your tax returns, we will give you 'actual' rent. We look at your Federal tax return, Schedule E. We see what you actual brought in, subtract out actual expenses, and the remaining, if any, is given as qualifying income. I lend in MN WI IA SD ND. Find me at Wi-Mortgagebroker.com | Cambria mortgage, NMSL 274132
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