Problems getting qualified, oddly narrow requirements

[Christopher Davis]

Problems getting qualified from conventional lenders. I am baffled at the rationale but it has happened twice now.

My overall picture is quite good I think. But the lenders are basing their decision on one very narrow metric: net income on my tax returns from one source. They don’t seem to care about anything else.

So, I make several thousand a month from an investment portfolio. My monthly income has been fixed and unchanged from this for ten years. Some of it comes from dividends, some from cash reserves if the dividends aren’t sufficient.

When I plug this all into TurboTax, and go through the whole thing, with deductions, including my financial advisor fees, basically it shows a net income of only a fraction of what I am actually taking in each month.

So the lenders are basing their decision on this one figure, which is really not accurate at all. They won’t budge. I also have rental income from a house I own free and clear (several thousand more). I also have an extraordinary amount in my investment portfolio, excellent credit, and zero debt.

But the lenders are only looking at one number: the fraction of income on one line on my tax return, which is simply not accurate. I’m not an accountant here, so I can’t even explain how that number gets there, it’s only a part of the picture. Hope this makes sense. I’ll update this post to try and be more specific

I will likely now talk to some credit unions and see what they say. Can anyone explain this? What else should I do?

Thanks so much for any help.

[Kerry Baird]

I highly recommend a lender that is accustomed to working with investors.  I have a few that I've used, because they offer difference "tools" and one that I return to is Ridge Lending, because they do know how to add back in deductions.