Debt To Income Ratio Aggrevation !
Hello,
Just closed on my first REI. It almost didn't happen though due to the Debt to Income monster !
My sitch : earn $55k yr salary, credit score around 775, consumer debt almost nill, primary residence mortgage $985 mos., no auto payments.
REI property : $208k, 5 yr. Int only @ 6.125 %, did a lease option to purchase 1 yr. later @ 20%.
Only reason the loan went through was due to the fact I had a signed lease BEFORE ( tenant literally fell into my lap via developement salesman ! ) loan would approve !
Have another property in same developement @ the same price that I will need to close on in Feb/Mar, any ideas !!!!
HELP !!
Thanks !
dont understand why you're having such a problem. my salary is comparable to yours. no debt other than house payments of 1300/mo.
i have a dependant non-working wife. debt-income ratio looks bad but not enough to get turned down. plus my credit score is 686.
I would look for a new lender, it does not sound right. You could also go stated income..
Doesn't sound right to me either. Is it because the REI price was so high?
Thanks for the replies. Not sure why the hassle, however this was the SECOND lender I was going through ! The first just denied w/ no recourse available to me. I must say, that the lender I was able to use had closing cost and ALL prepays toataling right at $4k. That appears to have been pretty good. The next property is due to close with the builder in feb/mar and if I use the builders lender they will cover $4k of the closing. Might work out ok. ( I have about 6 builder approved lenders to choose from. ) . Doing new construction and renting them out comes down to how cheap I can borrow $ for to allow cash flow. Since the first prop is going to be sold ( plan to 1031 it ) in 1 yr. the second I will hold onto as a straight rental ( for 4 yrs then 1031 it as well - time frame determining factor is that the mortg. will be via a 5 yr. int only loan ). Still nervous about getting snags though when going for the loan app. Won't the 1st prop rent count as income at around 70% ?
Thanks
With a score like that, you can do whatever you want. I happen to be a mortgage broker and have an office in Fla. if you are interested in seeing a few different options of what may be available to you, simply im me and I will be glad to put something together for you.
Depending on the LTV (Loan to Value) you could have went stated income/stated asset meaning a no doc loan or at the very least stated income. Then you should DTI just fine.
[addsig]
its been my experience that builder-approved lenders are the worst lenders to deal with. go with your own lender even if it costs u more in closing.