September 17th, 2010 10:58 PM by Eric Fang
I have one purchase loan failed last week.
The borrower has two rental properties other than the current primary. And they want to purchase another home as the new primary but they could not use the rental income from the current home because of less than 30% of the equity of the current home. So We need to use the rental income of $2000 and $2500 respectively from the two rental properties he owns. And the borrower indeed have rental agreement for those rental income. But the lender did not acknoledge that. They only check what's the rental income on the 2009 tax returns(schedule E), which was far less because of the remodel and some other reasons.
So for those purchases, if we need those rental income to qualify the purchase, just remember the low income on the tax returns may affect your purchase.