Debt Ratio

Gadget Joe

LoanSafe Member
Aug 22, 2017
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0
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If your collecting mortgage payments, would a lender consider 100% of payments as income. I'm getting
two different answers.
Answer #1 I have been told that only 75% would be considered income.
Answer#2 That mortgage payments are considered 100% income, and that rent is only 75% income.

I'm hoping the mortgage payments I will receive will offset the mortgage payments that I'm currently paying on my current house. I want to buy another house to be my primary residents, but don't want to take rate hit when buying my next house.
 

Jzone

LoanSafe Member
Jun 20, 2017
204
28
28
70
If your collecting mortgage payments, would a lender consider 100% of payments as income. I'm getting
two different answers.
Answer #1 I have been told that only 75% would be considered income.
Answer#2 That mortgage payments are considered 100% income, and that rent is only 75% income.

I'm hoping the mortgage payments I will receive will offset the mortgage payments that I'm currently paying on my current house. I want to buy another house to be my primary residents, but don't want to take rate hit when buying my next house.
Its been a few years since I was a landlord and renting out a house. However, rental income is reported on Schedule E.

You cant deduct your mortgage payment on a rental.

You need to report the rent that you recieve but also deduct the expenses and depriciation.

Go to irs.gov. It will explain everything. I tried to do the accounting myself for 2 years, then just paid an accountant $300 to do the books. Much easier and they know all the rules and deductions.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,101
181
63
San Diego, California
www.loansreduced.com
Hi Gadget Joe,
Feel free to reach out to me directly with any questions related to a new mortgage, my e-mail is: [email protected]

To answer your questions:
Rental income - how do we calculate it?
This would depend on when the property turned into a rental. If you don't show any rental income on the schedule E or if you obtained the property in late 2016 we would use the vacancy method.

Vacancy Method - we use 75% of the gross rental income
Tax Return Method - we base the income off the schedule E in this case.

I can always take a look at it for you to determine what you may qualify for, you can apply online here: www.LoansReduced.com