DTI and self employment - Adjusted or Gross?

[Ryan M.]

Hey y'all, I'm a newbie and I'm working on financing my first deal at the moment. I shopped rates and am working with a lender but I've hit a few snags. I am self employed and make plenty of money to cover 40% DTI but I had a really good year in 2014 and just a normal year in 2015 so although for me personally that's not a problem, the lender is concerned I will get flagged with "declining income". Will all lenders take issue with this? My solution to this is to try to hurry our cpa to get the 2016 return done but this presents another problem- my 2016 gross was substantially more than 2015 but we formed an LLC this year and if I take all possible deductions I may end up with a lower adjusted gross. So I'm stuck having to pay more tax just to get a loan. Seems backwards to me. Any advice? Are there lenders who look only at gross income? Thanks, Ryan

[Andy Davey]

If you are looking at a traditional lender then the concern is real however your lender should be able to see what is happening and why and make some good decisions. If the lender isn't work with you... move on... The property you are looking to finance should be part of the overall equation as well (if you have a deal at 50% LTV then it is hard to decline essentially anyone).

We don't work in Houston but if you need someone down there there are a couple of great lenders that you can go to.  PM me if you want that info.