High enough income?

[Anonymous]

I own 14 single family rental homes, one paid off,  and a couple with tons of equity.  I'm having a hard time refinancing the paid off house.  The banks say with low credit score  643 and low income they can't get past the underwriters.  BILL GATES DOES HIS TAXES TO SHOW AS LITTLE INCOME AS POSSIBLE.  ARRIANA HUFFINGTON PAID 0 TAX a couple of years ago.  And the reason I have low scores in part is because 3 of the house were put in as installement loans, and evertime I purchased a house I got a personal loan,  had the house fixed up,  and refinanced with no downpayment.  Great deal except 2 dings for every one house.  Plus I do have one collection for 95 dollars which I refused to pay because the people who reported me were thieves and I won't pay that debt.( Originally the debt was 25 dollars. ). Any thoughts on what to do? 

[Anonymous]

Wow, they said that 643 was low? I thought that anything over 620 was prime.

[Anonymous]

Your FICO score

643

Risk rate

31%

Analysis

Most lenders would consider consumers in this score range as somewhat higher risk.

This goes along with what the banks were saying.  But still,  you think there would be some common sense. I even had 70 grand saved up in the bank.  I have a friend in the bank that told me it really has something to do with how many houses I own.  But I tried several banks,  all with the same reaction.

[Anonymous]

I don't think it's so much the score as your income.  It sounds like what you're saying is that you write off a lot of things and it therefore appears you have little income.

Well guess what?  You do in the eyes of a lender.  What else will they go off of?  You can look around and do a "stated income" loan (you only prove assets - your 70k in the bank - but don't prove income, just "state" what your realistic monthly incoming cash flow is on average) or a "bank statements" program, which is where they take the average of deposits for 12 or 24 months and use that as an income figure.

FYI, I know this because I am a mortgage banker by trade - licensed in 38 states.  So I see a lot of loans!

[Anonymous]

Your dead on about the banks going off of the tax statements.  How do you find a bank willing to go off of stated income or the bank deposits.  ( I really like the deposit suggestion ) Do you suggest going with a broker?  And will going off of deposits or stated income come with a much higher price tag?

And by the way,  it really doesn't make sense that banks go by income on taxes.  I know GE may not have a high corporate income but I'm quite sure banks would be tripping overthemselves to make them a loan.  Taxes are about how you structure your companies,  and spend the revenue.  A truly high tax paying individual is not a sign of strength to me,  but a sign of weakness.

[Anonymous]

[quote]

Your dead on about the banks going off of the tax statements.  How do you find a bank willing to go off of stated income or the bank deposits.  ( I really like the deposit suggestion ) Do you suggest going with a broker?  And will going off of deposits or stated income come with a much higher price tag?

And by the way,  it really doesn't make sense that banks go by income on taxes.  I know GE may not have a high corporate income but I'm quite sure banks would be tripping overthemselves to make them a loan.  Taxes are about how you structure your companies,  and spend the revenue.  A truly high tax paying individual is not a sign of strength to me,  but a sign of weakness.

[/quote]

For commercial lending, you're right - but commercial lending is an entirely different animal than residential.  With your score, a stated income/verified asset loan is possible, and the rates might be a bit higher than what someone who can verify income would have, but nothing obscene.  I won't guess a number without seeing a file, but anything over 9% would shock me.