[quote=Josh]I bought a house ealier this year. My wife and I are comfortable with the $2k monthly payment (…) Currently we have zero debt (…) My mother-in-law wants to let us borrow $75k for in investment property as she overheard us telling other people that we have no downpayment for a second property. [/quote]
I guess you meant to say “zero debt” not including your mortgage? Going back to your question, it all depends on what your DTI (debt-to-income) ratio would be if you finance the investment property, and also your FICO scores.
Your current rental income needs to be documented showing a signed lease and also copies of checks, etc. Your MIL’s 75K could be a gift, but it could also be a loan: again, documentation is needed listing the principal amount, interest rate, and repayment schedule.
As for personal experience, 10 months ago I was truly debt free (no mortgage, no car payments, no credit card balances, no student loan, etc.). I purchased three investmenmt properties out of state, and the banks gave me a hard time asking for documentation for every little deposit they saw in my bank account. But the loans were approved. Then 5-6 months later I bought a house here in So Cal, and was able to finance that too with 20% down because my DTI was still within their guidelines.
