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.