How qualifying for many loans works?

[Jeff Thompson]

Hi,

I'm looking for an idea of what kind of financing I can get. I'm looking to quit my job in about 6 months, so need to make my purchases one after another until I'm tapped out because after that loans won't be an option for a while.

Is getting four 120k loans like getting one 480k loan? How does this all work?

I asked USAA who has pre-qualified me for my first purchase, they responded "To answer your questions, there are three things we look at, debt to income ratio, assets, and credit profile." Which didn't really answer my question... In other-words they'll tell me as we go along If I can qualify or not.

I know nobody can answer with any certainty, but figured you guys would have a better idea how it works.

Thanks,
Jeff

[Bill Gulley]

As Nathan mentioned your debt to income will vary with each deal or loan. It is very rare that a new purchase would increase your allowable income since 20% of the income is usually knocked off for maintenance, taxes and insurance and you must have some non-owner occupied experience to immediately count rental income....while this is a gray area I would think it would be unlikely for a new first timer to count rents unless all other areas were strong.

I would suggest you go for the single larger loan as the future will be hard to predict. Underwriting can change, and if your employor is aware that you will be leaving, you have another problem.

Lenders will send a verification of employment and income and there is a question on the form which asks the likelyhood of such employment to continue. If the boss says you're out the door in six months or less you income can be disqualified.

You will also be asked about your employment and if you quit 2 months after getting a loan that could lean toward fraud if you got in trouble with the payments...after all, saying you have a job and using that income to qualify while knowing you were not going to have a job is a little decietful...don't ya think?

Another reason to act now for as much as you can get.

Assets are almost ignored now, in fact the last one I got I didn't even have to list my assets.