Multiple mortgages, applying for new, any experienced people?

[Anonymous]

My spouse and I are relocating and looking to buy a house. We are relatively newlywed, and both were homeowners when we got married, so have two mortgages. We both have paid off about 2/3 of our current mortgages and have credit scores near or over 800 each. We also own a home free and clear in another state from an inheritance. We have enough cash saved up for 20% down on our budgeted target house in the new community.  My spouse is currently renting his home out for a minor profit, but I am paying the full mortgage on mine, about 20% of my take home income after tax. 

I have only been at the new job for about a month, so don't have much of a history of employment there. On my budget, the monthly total payments for mortgage on my current home and the targeted new home would be just under 50% of my net income (not gross) after 401K, taxes, etc removed.

Anyone have experience with multiple mortgages? How do the banks deal with us? We are low risk, but this is a tricky situation. I'm assuming people who own multiple properties and rent them out have somewhat similar situation.

In a perfect world, I could sell my house and not have this scenario, but as it has just been on the market for a few weeks, I can't predict what may happen. We can rent my house out, and/or rent a house in the new community, but we've priced out rentals in the new community, and find that we can finangle an ownership with taxes at an equal monthly payment to a rental. (Crazy, I know, but the new community is a huge college town, and the rental prices are inflated to reflect that market.) Thanks!

[Walt_K]

I only own one property, so not quite as complex as your situation.  When I was looking, the banks asked me about DTI, LTV on the other property, and reserves.  Some banks wanted me to be 70/30 on the first property and have 6 months of reserves.  But I found lenders willing to let me buy a new place without either requirement because my DTI carrying both mortgages is still low. 

It sounds like you are fine on LTV.  I'm guessing since you have 20% down for the new place, that you also have a fair amount of reserves.  What is your DTI using gross, not net?  Sounds like you'll be fine, but I don't know if they look at it differently when there are more properties involved.