Looking to refinance. Excellent credit, little debt, no income hist as unpaid caregiver for 7 yrs

[Anonymous]

I am being denied a refinance because of limited income history. I've cared for my mother for 7 1/2 years and just started getting a salary from her in November. Balance on my mortgage is $58,000, never had a late pmt, have 1/3 ownership of my mother's house which is paid for, $88,000 in an IRA, credit score between 750-800. Because she is paying the bills, I have low expenses, and rent out rooms in my house to keep paying my mortgage. I'm afraid that even if I were to wait til I've been receiving a salary from my mother for two years, they won't consider the income "legitimate" since I am being paid by my mother. What recourse do I have?

[StartingOver10]

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@Anonymous wrote:

I am being denied a refinance because of limited income history. I've cared for my mother for 7 1/2 years and just started getting a salary from her in November. Balance on my mortgage is $58,000, never had a late pmt, have 1/3 ownership of my mother's house which is paid for, $88,000 in an IRA, credit score between 750-800. Because she is paying the bills, I have low expenses, and rent out rooms in my house to keep paying my mortgage. I'm afraid that even if I were to wait til I've been receiving a salary from my mother for two years, they won't consider the income "legitimate" since I am being paid by my mother. What recourse do I have?

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Any mortgage lender is going to use income as a standard to measure your ability to repay.  The two year standard is normal. Are you claiming the rental income on your federal tax returns? If not, then it can't be used for eligibility. If you do claim it, then it might actually hurt your chances to use this income if you are also saying that your home is a primary residence yet you rent out rooms. This is something you will need to discuss with a LO.

There are exceptions to a lender using your past income. What might be possible for you is a 'bank statement' type loan. The LTV is lower and the interest rate is higher to mitigate the risk the lender is taking on.

[Anonymous]

I do report my income, and I share my home with renters. The income I receive from renters, however, nets me very little  because of the expenses I must cover. I have been advised to try a credit union where they carry the paper instead of selling it to investors because their rules may be less rigid and they may be freer to make exceptions.. I still don't understand why, when my equity in the house is more than 4/5 of its value, any investor would be concerned that I was a poor risk.