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Old 08-08-2017, 10:04 AM
 
3 posts, read 1,611 times
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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?
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Old 08-08-2017, 10:25 AM
 
66 posts, read 61,589 times
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The income is counted as 80% of the rent I believe. If the mortgage payment is covered by that you should be good.
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Old 08-08-2017, 10:58 AM
 
3,805 posts, read 9,292,836 times
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Quote:
Originally Posted by ucbears22 View Post
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.

https://www.fanniemae.com/content/gu...b3/3.1/08.html
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Old 08-08-2017, 11:45 AM
 
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Most loan products will use 75% of rental income and possibly want to see a lease agreement. Hopefully, it covers the mortgage payments at that rate.
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Old 08-10-2017, 08:07 AM
 
Location: MID ATLANTIC
8,659 posts, read 22,823,046 times
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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.
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Old 08-15-2017, 01:38 AM
 
Location: Baltimore, MD
68 posts, read 89,365 times
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Quote:
Originally Posted by truckinusa View Post
The income is counted as 80% of the rent I believe. If the mortgage payment is covered by that you should be good.
Hi,
I agree with truckinusa, but it is important to consult with a lender to take any decision.
Thanks!!
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Old 08-15-2017, 05:41 AM
 
Location: Southern California
4,453 posts, read 6,772,752 times
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I'm sure it is in Pfhtex link, the calculated loss is subtracted from your income, and not consider additional liabilities.
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