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A new lender must assume you’ll be paying both mortgages, unless you sell your existing home at or prior to closing on the new home. The days of producing a lease (real or otherwise) on the old home and getting income credit to offset the mortgage went the way of stated income loans. Only way to NOT count that payment would be sell the home, regardless of lender.
My wife and I are attempting to upgrade homes and we intend to sell our current home. When seeing how big of loan we could get on the new home, our mortgage broker informed us that our current mortgage would be included in any debt to income ratio calculation. This doesn’t seem logical to me. Is this an industry wide standard or is my current mortgage broker being way too conservative? Other details: Reserves to pay 6 months on both mortgages after making a 10% down payment on the new home, monthly income – 11,000, current PITI – 1,730, other debt – 350, proposed PITI on new house – 4,000. Thank you in advance.
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