Underwriting question on income used (401k, properties, bank, deduction)

[Catfishhoward]

I’m looking into investing in 2 rental properties and was wondering what type of itemized deductions underwriting will use from my tax return to determine my allowable monthly income, I have the following (Medical $1300, Taxes I paid $3200, Interest I paid $5800 and Job Expenses $14,000).

Another question, will underwriting use my current mortgage payment in determining my debt-to-income ratio? Thanks.

[SmartMoney]

Take your gross income, if W2, and subtract 14K/12 for monthly income. That's the income we use.

If you are schedule C, take net income for 2011 and 2010 (or 2012 if ready), add together and divide by 24. That's your monthly income we use.

(simple version, not necessarily complete)

[gabrielh]

Since you are the expert:

The gross income amount on my W2 is lower than my total earnings because of before tax deduction (health,dental,401k etc..).
Will the bank be able to use my Total Earnings instead of W2 for qualification purpose?

Originally Posted by SmartMoney

Take your gross income, if W2, and subtract 14K/12 for monthly income. That's the income we use.

If you are schedule C, take net income for 2011 and 2010 (or 2012 if ready), add together and divide by 24. That's your monthly income we use.

(simple version, not necessarily complete)