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I have 59 score debt to credit ratio, score of 772 , income about 60 . Are my standings good?

I want to see if i am ready to purchase my first investment property. I got about 50k including closing cost to start. My debt to credit ratio score is 59, balance 144k credit limit about 242k. Bring in yearly about 60 k . I opened my own company less than a year (self employed 1099). I bougt my home a bit over 2 years ago, perfect payment history, i gave 20% down conventional. I got a bargain and have about 100k equity. Am i in good standings to buy a duplex, commercial, or any other. Please advise..., thanks, Erick
  • April 29 2013 - Miami
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Answers (2)

Your problem is you have no experience of being a landlord. For Conventional financing, you need to have filed at least two years rental income in order to use future rents to offset your mortgage payment. Where as FHA or VA have different requirements. With a 59% DTI I would say your chances are slim to none getting approved. The other problem is your less than two years being self employed. That alone could be your deal killer. My suggestion is to go to Credit Union or use Private Money. The rates are actually not that bad and qualifying is a piece of cake. This way you can get into the property fast and do a 2 or 3 year fixed rate and refi once you have your ducks in a row. Just my opinion.
  • April 30 2013
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You obviously don't have a "plain vanilla" scenario, so more involved then yes or no answer. Suggest you contact a local lender to review your financial picture including "59 score debt".  Buying investment properties require tighter qualifications and debt ratio and reserves will be an important element. Only 1 yr of self employment is less then required, so that will be biggest of several issues.
  • April 30 2013
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