qualifying for financing having multiple existing properties - Posted by Scott

Posted by ali on December 24, 1999 at 20:56:50:

i am mortgage borker , i have some lender who dont care how many properties you have,
other thing was how stated income works
if you are employed since 2 years at your current job
and somebody can verify it,what ever income you state at your application they have to take your word for it, lender would not verify it but you are going to be in 70 to 80 ltv .if you are in texas and need investor loan give me a buz. 972-466-2551

qualifying for financing having multiple existing properties - Posted by Scott

Posted by Scott on December 23, 1999 at 09:25:28:

I am hoping for some advice/information regarding qualifying for a loan while owning 2 other properties.

I hope to buy a single family home and currently own 2 duplexes. The duplexes have positive cash flow (even if only 75% of rents considered) but I am concerned about the effect they may have on my debt ratio when trying to qualify for the next property.

If a lender includes the debt (and income) from the existing properties, my debt ratio, including the debt payment for the next house, would be somewhere between 45-49% which is high for most “conventional” lenders. Is there any way to consider the existing properties as a “wash” since the income covers the debt, and only consider my salary and the new loan in calculating the debt ratio for the next house ?

Are there other options ? How do “stated income” loans work ? Is that a way to use 100% of rental income rather than 75% as most conventional lenders will do ?

How does one acquire multiple properties while maintaining a debt ratio in the 35-45% range ? Or, do you have to use creative financing only - owner financing, non-conventional sources…

Any advice/knowledge is greatly appreciated.

There’s also the FNMA & FreddieMac number of mortgages - Posted by David

Posted by David on December 23, 1999 at 12:36:32:

Any mortgage from a bank/s&l/mortgage company that is sold on the secondary market must meet Fannie and Freddie standards. No more than 4 mortgages. What a stupid rule. Five $10,000 mortgages are worst than three $100,000 mortgages. Who thinks up this stuff?
Anyway if a bank portfolios your mortgage and keeps it in-house then they can use any lending rules that they want since they’re not selling on the secondary market.
And best of all is seller financing where you and the seller establish the rules. Go make some rules!
Merry Christmas

Re: qualifying for financing - Posted by JPiper

Posted by JPiper on December 23, 1999 at 09:56:55:

In terms of your rental properties, the lender should give the gross rent a 25% haircut…and then offset the remaining rental income (75% of the total) against the mortgage payment. If this is a negative number this difference would be considered a debt for the purposes of the back-end ratio. If the number is a positive number the difference is added to other income that you may have.

The point is the income and the mortgage loan are offset against each other…the mortgage isn’t counted twice against you.


Re: qualifying for financing having multiple existing properties - Posted by Robert McNeely

Posted by Robert McNeely on December 23, 1999 at 09:35:33:

Are you using a smaller local bank that does not sell it’s loans? I don’t worry about it with the bank I use. I make sure the deal is solid and have had no problems in buying multiple properties. The personal relationship with YOUR banker is of utmost importance.