All Forum Posts by: Mark Spritz

Thanks @Shaun Weekes for your replies. Maybe I am not asking the question correctly. I am asking a why question versus a what are my options question. I understand the other options outside of traditional mortgages. 

My question is specifically about a traditional mortgage. So let me exaggerate my example more. Let's say I have 5 million dollars in the bank, cash, no interest being made, so no income there. However, I don't want to pay cash full for a property. I want to use a traditional mortgage. I have no income, or there is income but the primary home already takes up the .50 ratio. Why does the income ratio still count in deciding or declining on the mortgage? The Net Worth is far greater than the loan amount, but because debt to income doesn't meet their ratio that it would get denied.

I want my example to be the extreme to show that the debt to income ratio should mean nothing in the example and the traditional mortgage should be approved. 

Thanks

Mark

Or another example. Let's say I had 1 million dollars in cash accounts at the bank, and I wanted to buy a 100K house with 25K down  and the  other 75K Traditional mortgage. But the income shows 5K a month and you already have your personal home mortgage which is $2500. Well you can't qualify for a traditional Fanny/Freddie mortgage.

Currently only rental property I have is in my retirement plan, so cannot be used here. Also an asset depletion loan is like a portfolio loan. That is what I am trying to avoid. 

I am specifically wondering why having more assets/cash that is many time more than the cost of the property not able to offset the income portion that is being used. The cash left over in the bank can easily pay off the mortgage, and even be able to pay all the bills for the period of the loan, but it is like that isn't weighted accordingly.

So, if we were to use a traditional mortgage route to buy a Rental Property, the underwriter will have to check you income from job, others, as well as credit, amount of money you have and also any assets. Each one of these has their own "calculation" that the underwriter uses to choose whether to fund the loan or to deny it. When it comes to income they have calculations like .40 or .50 of your income has to be more than the housing costs (all your costs). So if I made $5000 a month, then they would look to see if the mortgage, taxes, insurance total no more than $2500 a month, if they use the .50 calculation. What doesn't make sense if that even I had enough cash to buy the property in full, but decide to get a mortgage instead, that they can't just use the cash in the bank amount and not need to use the job income number at all. I mean you have enough cash already for the full price, but you want to leverage anyway. 

Another quick example. Let's say I have $100K in cash, and I want to buy a property that is 50K, and I woulds rather put 12.5K down and get a 37.5K traditional mortgage. But I don't have a job, say I am retired. I would be rejected by the underwriter only because I have no job/income. Even if I have $250K in cash, with that same property I think the underwriter would reject it because $0 monthly job income doesn't pass the .50 calculation.

That doesn't make sense.

Anyone know of a bank/mortgage lender, not a portfolio loan, but a traditional mortgage that would lend to someone that has 2-5X more in cash and assets than the total of the loan amount, but no job income.

Thanks

Mark

Sorry if I have a bit of a problem explaining my situation.

Starting mid August I will no longer have a FT at a company job with income.

I have a large amount of money ready to invest in Rental properties. (I have some properties in my SOLO 401K, but this is not about those)

I have equity in a couple of other personal properties/non-rental and know that I have a very high Net Worth.

However, I want to purchase these properties into my LLC which I have had for over 10 years, but the past few years the income filed were not that large numbers I used to have when that was what I did full time. So if the mortgage company asks for income from the LLC for the past 2 years, it will be really low. Whereas my W-2 from Work was high.

So I want the purchases and mortgages to be under my LLC, and without any more FT W2 income coming in, will I be able to get mortgages on these properties? Or do I have to do them under me personally (actually would be under revocable living trust because those other properties I have are under that Trust.)

I hope I have framed my situation. My question is more about suggestions or recommendations you might have on my best approach to get 30- year mortgages for these properties.

Thanks

Mark

In reading a couple of other threads I think it is against the forum rules here to do self-promotion, and it is sometimes tough to tell if a link someone posts is truly just a recommendation or a self-promotion somehow.

It was the underwriter that kept insisting my Solo401K property show up in my personal Home refinance. There is no way to be able to talk to the underwriter like that. 

This Mortgage is for my personal property home. Nothing to do with Solo 401K, and shouldn't be. But unfortunately, the underwriters keep wanting to put a property owned under my Solo 401K as my own personal liability/asset. That is illegal.

Thanks for the replies. Looks like NASB is a good .5% higher than the other mortgages I was going to get. Too high a difference. But thanks for that suggestion.

Mark

I am having a big problem. Since Dec I have been trying to refinance my personal home. I have now tried 3 mortgage companies and have gone through the whole process only to find out at closing that I cannot sign the paper work because none of the companies/underwriters understand or know what a Solo 401K is and therefore they keep adding one of my Solo 401K Trust plan properties as an asset/liability to me personally. The property is correctly deeded and listed as a property owned by my Solo 401K plan, even the clerks at the county agree. But because the underwriter doesn't understand that, they say that that property HAS to be in the mortgage loan paperwork. So I can't sign and refinance my home because of that and that is costing me money.

What can I do? Anyone know of a good mortgage company that does personal homes and understands what a Solo 401K plan is?

Thanks

Mark