DTI

[Anonymous]

Hi everyone,

Let me give a little background. I recently closed on a house in March, FHA. I am always thinking about the future and i came up with a five year plan. I want to know if it is possible to keep my house and by another one in five years with a convential loan (%20), with both payments being around $2400 total. Will I have to include my first house in my DTI or can I get a renter and claim both income from the renter and the mortgage payment. How does this work or how can I accomplish this. Thanks.

[ShanetheMortgageMan]

5 years is a lot of time for guidelines to change, however under current guidelines, if you were to vacate your current residence and simultaneously rent it out while purchasing a new home, if it's in the same area, you actually have to have sufficient equity in the vacated home (30% equity requirement if the new mortgage you are obtaining is conventional) in order to use the rental income from the vacated home in your qualifying income.  Alternatively you can vacate the home and rent it out, rent a home yourself, claim the rental income on your tax return for at least 1 year, and use it to qualify that way without the equity requirement.

[Anonymous]

Thanks again for the priceless advice Shane.