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Great credit and trying to buy a bigger house and rent or sell our current house what are some loans

We have great credit and good income but I have always been told that you need to qualify for 2 mortgages since rental income doesnt count?  We are slightly upside down in this house which I think would make it hard to sell.  Are there any programs that would help us get into a new house with less strict DTI limits?  Our only other debt is one car pmt that could prob be paid off if needed  
My husband also just got a new job in downtown Atlanta that ww would like to move a littke closer.  Can you use rental income if you live a certain distance away?
Thank you
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October 21 2012 - Cumming
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Answers (4)

Wendy,

Unless you have 25-30% equity in your current home you will not be able to use the rent payment even if you move far away from the current home.  It sounds like you do not so you would have to qualify for both payments.  At 29% DTI you should be fairly look depending on the size and payment of the new home to do a Conventional or FHA loan.  You can do a minimum of 3-5% on Conventional or 3.5% on FHA for a down payment. 

A lender would really have to look at all the details to further let you know if it would work.
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October 22 2012
As you mentioned in your first post, it won't matter if you rent or not. Both mortgages will be counted against you in your DTI. Good comp factors like down payment, reserves, etc along with good credit will allow you to push the dti. A dti of 45 should be no problem. A conventional loan may allow you to get close to 50. FHA may allow you to get a little higher than that. It will all depend on an automated underwriting decision as you would be above manual guidelines.
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October 21 2012
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I think its about 29% including the car.  We would have about 20k down more or less if needed.  Would like less if possible!, what is the DTI needed including a second mtg if we rent this house out?  Are there amy stips that help if we move closer to the new job?
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October 21 2012
Do you know what your current DTI is? FHA will be the most lenient loan for you as far as dti is concerned. How much were you planning to put down?
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October 21 2012
 
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