High debt ratio due to rental property - advice?

[ShanetheMortgageMan]

FYI, this thread is 2.5 years old, I suspect the OP may have found the solution they were looking for.

[gagaliya]

i am sort in the same boat, my net net debt to income ratio is 27%. Have a mortgage on my primary residence, and have a rental bought 5 months back that's paid with cash, and it was rented out 3 days after i closed. I have copy of the 1 year lease as well as the bank statement showing the rent income every month, and my credit is 800.

So far i spoke with the big banks directly, and they made me jump through so many hoops: must have 24 months of rental income statement, cannot use the rental income, and so on. And i have been with some of those banks for over 10 years, and one of them holds my current mortgage which i was never late on since I got it years back. Whole thing just pisses me off, didnt even bother to continue. Even the loan guy agreed with me but said he cant do anything due to company policy on rental income and investment property mortgages nowdays.

I am going to try a broker next, hopefully something can be worked out. There are many good value properties here that will provide immediate positive cashflow, except the financing nowdays is just insane.

It seems we went from the wild west to north korea dictatorship. Where did common sense go?

/rant off

[mortimer]

Originally Posted by ooodsie

... student loans ... silly to pay off when the
interest rate is 2% (the balance is 10k left).

I know this thread is old, but I had to comment on this ( for posterity ).

A $10k loan balance costing 2% is piddly when you are trying to do something
like finance a house. It should have been paid off to clean things up.

It's one thing to have a $100k note at 2%. If you can earn 8% somewhere
then you can pocket the difference. Since it isn't likely that one can earn
8%, then keeping a $10k note for the $400-600 potential profit is nuts.

[millamilla]

Wait to buy your next property until you have a year of rental income on both properties, during that year save 6 months worth of mortgage on one or both properties, claim your rents as income on your taxes. Then 75% of that income is considered as real income after the vacancy factor of 25% is deducted. Then you can look into a refinance on one or both of your properties, to possibly get cash out for a down payment on a new property (depending on if there was any appreciation on the properties) When getting approval on your next property your debt to income will improve significantly with that newly added, provable taxable rental income. good luck