I just had my first prequalify application declined. As I have learned, it is routine to approach numerous lenders until you get the yes, so I almost expected this. Just trying to assess. The lender was very polite and explained why. He seemed to base the entire decision on one data point, my current monthly income. And not even all of my income. Just one piece.

Basically I don't fit neatly into a traditional income and employment box. I live off dividend income from investments, several thousand per month. It has been consistent, unchanged, for ten years. My primary home is valued around 650k and is fully paid off (in another state). It is now rented which is bringing in several more thousand per month. But this is new, so he couldn't count that due to lack of history. He said the dividend income wasn't enough. This was based on a rough loan estimate of $125k.

Excellent credit, zero debt, I have 25% for the down payment.

Another piece I don't understand is that the tenant income will actually be paying the loan, but that doesn't happen until I get the house. So, chicken and egg type of thing. Isn't that also a factor?

Anyway just trying to assess my strategy for the next application. Is there a minimum monthly income, like an actual figure, that I can aim for, to be better prepared next time? I thought the decision was based on a combination of factors.

I get the feeling any traditional bank will now say the same. I will likely focus on credit unions. Thoughts or suggestions?

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First prequalification declined, trying to assess

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