Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
I currently have a rental property but rent as my primary residence. I am looking to purchase a primary residence (and keep my rental property). How will a lender compute my debt to income ratio (will they count all of the rental income?). Also, i took a loss on it the last 2 years on my taxes, how will that affect?
I currently have a rental property but rent as my primary residence. I am looking to purchase a primary residence (and keep my rental property). How will a lender compute my debt to income ratio (will they count all of the rental income?). Also, i took a loss on it the last 2 years on my taxes, how will that affect?
They will use rental revenue as reported on your Schedule Es for the past two years, factoring in any months wherein the home was not rented, repairs, and depreciation.
Pfhtex is spot on. All major loan conduits use Schedule E to calculate rental income. It use to be a simple calculation, but now it's more involved. 75% of the lease is only used when there is no IRS track record, ie, the property is just now going on the rental market.
I'm sure it is in Pfhtex link, the calculated loss is subtracted from your income, and not consider additional liabilities.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.