How can I qualify for a large mortgage with low taxable income?

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How can I qualify for a large mortgage with low taxable income?

Tyler D.
Member since 2019 · 219 posts · 99 votes

Currently I am trying to finance either a duplex or a 4plex, which would be 350k or 700k respectively.

Of course, I want the 4plex for more units, but I'm struggling to see how I will qualify for the loan. It would be a new construction (units not occupied), so afaik I can't use the 75% of current rents to qualify.

I do have a decent income, and could easily make the payments, but the majority of it is not taxable (military benefits). I've spoken to lenders and they already said they would not consider it because it doesn't fit their guidelines.

So, what should I do? Obviously, I could ait and slowly build up to it, but I don't see a point when I can easily make the payments and the only thing stopping me are the banks' bureaucratic procedures. What can I do to qualify?

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  • Aaron K.
    Specialist · Riverside, CA · Member since 2015 · 6k+ posts · 3k+ votes
    6y

    Why don't you buy something that isn't brand new construction.  This isn't the bank's problem this is your problem, you may be able to find some lenders who do manual underwriting but don't blame the bank.  Plus how much does this $350k duplex rent for because it doesn't seem like the best of deals on the face of it.

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  • Abel CurielBusiness Member
    Real Estate Agent · Queens, NY · Member since 2016 · 2k+ posts · 1k+ votes
    6y
    Originally posted by @Tyler D.:

    Currently I am trying to finance either a duplex or a 4plex, which would be 350k or 700k respectively.

    Of course, I want the 4plex for more units, but I'm struggling to see how I will qualify for the loan. It would be a new construction (units not occupied), so afaik I can't use the 75% of current rents to qualify.

    I do have a decent income, and could easily make the payments, but the majority of it is not taxable (military benefits). I've spoken to lenders and they already said they would not consider it because it doesn't fit their guidelines.

    So, what should I do? Obviously, I could ait and slowly build up to it, but I don't see a point when I can easily make the payments and the only thing stopping me are the banks' bureaucratic procedures. What can I do to qualify?

     Curious to know if these have been local, small lenders. I can see how the bigger banks wouldn't do a deal like this. Small lenders may able to make this work despite tightening lending requirements.

    Another option could be seeking a co-signer/partner to go in on this deal with you.

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  • Tyler D.
    OP
    Member since 2019 · 219 posts · 99 votes
    6y
    Originally posted by @Aaron K.:

    Why don't you buy something that isn't brand new construction.  This isn't the bank's problem this is your problem, you may be able to find some lenders who do manual underwriting but don't blame the bank.  Plus how much does this $350k duplex rent for because it doesn't seem like the best of deals on the face of it.

    Because it's cheaper to build in my area than to buy existing properties, and it cashflows well. I wouldn't do it if the numbers didn't make sense.

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  • Tyler D.
    OP
    Member since 2019 · 219 posts · 99 votes
    6y
    Originally posted by @Abel Curiel:
    Originally posted by @Tyler D.:

    Currently I am trying to finance either a duplex or a 4plex, which would be 350k or 700k respectively.

    Of course, I want the 4plex for more units, but I'm struggling to see how I will qualify for the loan. It would be a new construction (units not occupied), so afaik I can't use the 75% of current rents to qualify.

    I do have a decent income, and could easily make the payments, but the majority of it is not taxable (military benefits). I've spoken to lenders and they already said they would not consider it because it doesn't fit their guidelines.

    So, what should I do? Obviously, I could ait and slowly build up to it, but I don't see a point when I can easily make the payments and the only thing stopping me are the banks' bureaucratic procedures. What can I do to qualify?

     Curious to know if these have been local, small lenders. I can see how the bigger banks wouldn't do a deal like this. Small lenders may able to make this work despite tightening lending requirements.

    Another option could be seeking a co-signer/partner to go in on this deal with you.

     I'm going to check out the local banks, that might be a good option. The banks that I've talked to so far seemed hazy on their willingness to use 75% of rents to qualify for a mortgage. Some said tenants already need to be there and some said that they might be open to using future rents with an experienced landlord. That might be something to look into.

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