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How can I buy a house when I am refused for a pre approved mortgage?

I only have enough money for a down payment but I still have to borrow a considerable amount. But according to the banks I dont make enough to buy a house. But I know once I get the house the tenents rent will pay my mortgage. Why isnt this enough for the banks? People are always looking for somewhere to live so I'll always be able to pay my mortgage & even so I could pay the mortgage regardless of if I had tenants. I pay my rent right now. I ve ben paying it for years and was never late. So, how do I get $ to buy this house?

Public Comments

1. find a house with some built in equity, one that is appraised for more than you are paying for it. That, and your down payment should make the bank give you a second look.
2. The bank is correct in their decision. They cannot look at future income - only present and past income. Therefore the decision to not extend you a mortage is correct. It is a fact of life man! You will need to look for property where your own income will service the mortgage (OR get married).
3. Try finding a cheaper house. It sounds like you want an investment property so that you can generate some income. You need to go to a hard money lender, because they have easier qualification.
4. There are many options available for 100% financing. The first thing I would do is determine if the scores are as high as they should be. There are things that can be done to improve them in less than 1 week. Higher scores provide additional options that you may need. Check my blog for more info.
5. well try trust company's and credit unions their rules are not so strict also look at the cost of the house you want to buy. maybe it is too high find out what they will lead to you and look more in your price range. currently own a house with a basement suite but don't always have it rented. that is life.banks want to see a contract or a lease not a month to month rental agreement. maybe you need a co-signer or just look at other opportunities to buy a house and buy a rent to own or a vendor take back the mortgage or an assumable mortgage deal. you can buy a house just maybe not the one you currently are looking at.. do your homework and see how you can buy one and what the deals are. shop around
6. You have vertually answered your own question. You went to a bank. Banks are the most conservative of all the lenders when you want to borrow for a house. Their criteria is so strict. I admit that I am at a loss as to what you are planning to purchase. You are stating that once you get the house the rents will help make the payments. Do you plan to purchase a 4-5 bedroom house and rent rooms to tenants? If that is the case few if anyone will lend you money to do that. What you are trying to do is purchase a single family home and turn it into a rental. That borders on being illegal in some states or cities and definately a no no in the eyes of banks and any other lender as far as I know. You are not allowed to turn a single family house into a rental. Now before you tell me, but I know several friends that are doing this and making a killing. Yes it is probably true, but they did not tell their lender/bank that that was their Intention. Now if you want to purchase a duplex or 3-4 units to rent out, then you can use the part of the rents to pay the monthly mortgage. 1-4 units are considered as a single family for the purpose of funding loans. Now let's get to the part of pre-approval. Stop telling the people that you are going to borrow the money for the down payment. Contact a "mortgage broker" look in your local telephone book for one, tell him your ideas on what you want to do, except that remember the house is not a rental. (Can't do that) You want to purchase 1-4 units and become a legal land lord. This mortgage broker will ask for many documents, make sure you get them to him as soon as possible. He will fill out a loan application run a credit check to get your credit scores. He will also want to see how you are paying your current rent, so if you have cancelled checks make copies and give them to him. If you don't have cancelled checks,do you rent through an agency and not an individual? If you rent through an agency give the mortgage broker the name of the agency that manage your apartment or house. He will send a piece of paper to verify your rent and if you made the payments on time. Once the mortgage broker has all the information about you,he will pre-approved you, sit down with you and explain programs available to you as well as the total amount you will be able to borrow to purchase a house or 1-4 units. #1 Ask if you qualify or a stated income program? #2 Ask if you qualify for a sub-prime loan For these two programs the interest rate will be slightly higher, but it puts you into a house or 1-4 units. The interest rate no matter what you pay are tax deductable on your fed income tax. (Please check with your tax advisor for all tax advise) If the primary objective it to get you into a position where you can own a house or 1-4 units one of these programs should put you in that position. Remember that the mortgage broker is on your side and don't get paid unless they get you a loan, so be honest with them, but there are somethings you need not tell them. Once you have your house you are able to do what ever you want. Check with the local city to see if you can rent out rooms the way you want. They might have an ordiance against that. I hope this has been of some use to you, good luck. "FIGHT ON"
7. Did u go to a bank or a mortgage broker? Banks have higher standards. If just went to a bank then email me, i may be able to approve you. I work for a big mortgage company.
8. tenant income is considered passive income.....banks can't rely on it, because you can't guarantee that it will ALWAYS be rented to quality tenants who always pay their bills on time.... Further, you can't afford it. period...the irony is the 100% of the people foreclosed upon "qualified" for their loans.....banks are as lenient as they can be to get people into mortgages.....and yet they say you don't qualify....thank your lucky stars you don't have to be in that mess.. Here's the solution to your problem....Pick a mortgage amount you can afford (alone on your own)......take the difference between your current rent and your new "pretend mortgage" pymt and stick it in the bank.......do that for six months.....if you never need that money, and meet all your monthly obligations...you can truly afford it....and the great thing is......YOU'LL have money saved up for the purchase!!!!!
9. If you purchase a home that is already rented out, you can use that lease to show additional income. A lender will only allow you to count 75% of the rent towards income, the additional 25% they look at as being used towards maintenance items and for vacancy. If you are purhcasing a home that is not already tenant occupied, and can secure a tenant with a lease contingent on you buying the property, that will work too, although that is harder to accomplish. Other resonders were right in saying that banks are the most conforming. Look in your local phone book for mortgage brokers. Talk with a few of them and ask what their experience in investment properties is. Remember, your interest rate will be higher buying an investment property than it would be with an owner occupied property. If you have enough money for a down payment, can that be used to pay something off so that you no longer have that monthly payment? For example, when I bought my second investment property, my car payment was about $250 a month, but I only owed $1000 on it, so I paid it off and that put my debt to income ratio in a place that I could afford the home. I sell primarily investment property. If you would like to discuss further, please email me and we can chat further. There are so many different ways to do things, I could type all night and still not hit them all.
10. We have numerous programs that can tend to your needs, 100% financing with no money out of pocket. Banks dont offer programs like we do, a bank will take ur info, run it through there system and give u one offer and if they deny it, thats it. At Bourdeau Financial we have thousands of different programs to help you get into your new home. I could have you pre approved within 30-45 minutes. I can be reached at (866) 530-7300 x7316. I look forward to hearing from you just so you can get an idea of what we can do for you. No pressure to join with us, I would like the oppourtunity to help you in your purchase of a new home.