Loan with low Income but lots of Assets

[John Barnes]

Hi Everyone,

I'm trying to assist someone in obtaining a loan. The person in question:

Owns primary residence (300K)

Has +-300K in equities

Income of $35,000

They took out a HELOC and used those funds to buy a 4plex for $120,000.

They have waited 6 months and are attempting a cash out refinance to then pay down the HELOC. I am trying to help them obtain financing but the issue appears to be their Debt to Income Ratio. Lenders have been requiring 40% down and the best rate I found was 5.625% on a 15 year note.

Both credit scores are over 800 so there is no issue there.

I'm trying to ask and see if there is something I'm missing, or if there is another avenue I should explore.

It seems silly that Income is an issue when they have so much liquid assets? I don't fully understand why the banks are looking strictly at DTI when a borrower has good, liquid assets.

Any direction would be great. thanks

John

[Casity Kao]

@John Barnes You need to hit the phones and keep calling more lenders that count their rental income. I have lenders that will even allow you to buy a property based off the rent of the current tenants, at an appraisal of 75% LTV. For frame of reference, my team has called over 400 lenders in our state in the last year. Try to shoot for lenders that have lending portfolios of $250 million or less. The key is your investors have very good credit quality so alot of banks will open their lending for high credit quality.