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Do HOA fees from a rented out home count towards the DTI when applying for a new home mortgage?

I am planning on purchasing a new home with the intent of renting out my current home.  I would like to know if HOA fees from both homes will be included in the DTI or only from the new home.  I have been researching the web for this answer and have seen mixed things.  Some sites say the total home payment of my old home would be considered, although not explicitly stating HOA fees.  Other sites state that the DTI only includes items that appear on a credit report.  Since HOA fees from my current (soon-to-be rented out) home are not included in my credit report, does this mean it wouldn't be included in my DTI when applying for a new home? Before I apply for a pre-approval, I would like a definitive answer regarding if HOA fees from both homes would be factored into my DTI, and if so, please explain why this is the case, since HOA fees are not on my credit report.  Thanks!
  • March 04 - US
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Answers (7)

Yes this is an expense of the home you own or are looking to buy.  The same as taxes, insurance or PMI.
  • March 05
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The HOA fees and other housing costs from your current home will all be taken into consideration buy a lender when applying for your next mortgage. Since you will still be paying these fees, lenders will have to consider them. If your finances are strong enough to support all these fees and two mortgages, then you should be fine. So the best thing for you to do is to speak with a knowledgeable lender to see if you can get started on financing a new home. If you need additional assistance, feel free to reach out. Good luck!
  • March 05
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Ray is right right.....PITI includes HOA fees.
  • March 04
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The HOA fee on the soon to be rented home will be included in the debt ratio for the same reason the HOA fee on the new home will be included, it is an expense. Even though it is paid outside of the PITI payment it is still a housing expense.
  • March 04
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HOA fees will be taken into consideration.  Property taxes are not on your credit report (just like HOA fees), but your total housing expense (including taxes, homeowners insurance and HOA fees) will be taken into consideration when calculating your debt-to-income ratio. 

I can verify definitively that your HOA fees will be taken into consideration without exception. 
  • March 04
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Yes, they will use your mortgage, property taxes, homeowner's insurance and HOAs to be applied toward your DTI.
  • March 04
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Both are to be calculated as they are considered  housing / rental  obligations
  • March 04
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