How long before most banks calculate Net income/loss on rental???

Question

Hello again,

So, my current bank requires me to wait a whole year before they calculate net income or net loss on my first rental property.

Needless to say, I am not thrilled because I bought undervalue (20%) and forced a slight appreciation (5%) on the property.

The bank also forced me to put a large down deposit (45%) on the property due to my debt to income ratio along with a 25 year mortgage at 4.5%.

Thinking about doing a cash out refinance on the property with a 75% LTV in six months, but...

Here is my question: Are there federal guidelines that regulate how slow or fast a bank is required to calculate net income or net less for my debt to income ratio?

I was thinking of using an online bank/mortgage lender to cash out and repeat the process so I can have multiple flows of income.

Ideas/Thoughts?

Thanks!

Kelly DeWinter · Answer

Lenders don't fore people to do anything, they offer terms, that a borrower is free to choose to accept or decline.

The short answer is No, that portion of a banks business is not regulated, it's built in to a banks business model for handling risk.  Basically you are being told you are a bad risk to under right at this time and that Once you have proof of one years income, you MIGHT be worth underwriting.If you have multiple properties, some lenders will allow you to wrap them in one load and cash out, but you would still need 1 years rental income.

Account Closed · Answer

Loans are broken into two groups: 1. Those that are government insured and 2. Those that aren't. A bank that does "Portfolio Loans" keeps the loans "In-house" and has more flexibility in which loans they will do. Find a small regional or local bank that does Portfolio loans and ask them what their requirements are. Keep looking, you will find one or even a Credit Union that will do a refinance 30 days after closing or 90 days after closing or 180 days after closing. Just keep calling around and ask if they do Portfolio loans. Some lenders at LendingTree (.com) will probably do what you are looking for.