Can't get pre-approved for mortgage or refinance existing mortgage (insurance, loan, interest rate)

[dthlo]

I own an apt in nyc and rent it out in a 24 unit condo building. 6% interest rate on 30yr fixed. I have 40-50% equity in it. Credit score 800. Freddie Mac owned.

1. I tried refinancing the apartment through various lenders, but was told I did not qualify because of the following:

5 out of 24 (21%) owned by one entity which is greater than 10%
10 owner occupied, 14 rentals = 42% rentals which is less than required 51%
2 owners have payment delinquencies

Any suggestions on getting this unit refinanced?


2. I tried to get pre-approved for a new mortgage after seeing an apartment that I liked. On paper, I can afford it. But after I sent the lender my income tax returns and schedule E, they thought otherwise. I was told that my DTI (debt to income) ratio with the last two years (2011 2012 income tax) averaged is 59% and the maximum we can go up to with an exception is 50%. Usually it is 40%. In 2011 I had a large loss from rental income because the apt was vacant for 1/2 year. Is it necessary for lenders to look at last 2 years of tax statements? I was also told the following:

"Fannie and Freddie require rental income to be calculated. We take your net rental income figure and add back 4 deductions: Insurance, Mortgage Interest, Taxes and Depreciation. The sum of that number is the income amount we can qualify you with."

And right now they said that sum is too low. But doesn't equity, credit score, etc play a role? And how does "relocating" and "commuting distance" affect this process too?


Right now, the only options I have been told I have are to sell the rental apartment or sit on it with its 6% interest rate. Please help. Thanks!

[Hemlock140]

Sure, both equity and credit score play a role, but in apartments/condos so do the factors mentioned, and others such as # of vacant units and financial status of the homeowners association. For single family homes those are not considerations. With your equity and interest rate I would suggest selling it.

[dthlo]

can you talk a little bit more about why you would sell it with the equity i have?

[Pfhtex]

1. %Ownership issue should not be a factor in a true Freddie Mac Open Acess/HARP loan. If the company did not get a HARP approval, and got a "no appraisal waiver" or something like that, then the owner occupied % does come back into play.

I recently HARP'd a condo owner, but could not refinance his neighbor next door because she did not fit HARP guidelines, and % owner-occ came back into play. Tough to explain that one!

2. Their information is accurate. If it were 5-7 years ago, credit/nature of income/bank statements/stated income would be an option. But the over-correction that has taken place in lending has left good-credit borrowers such as yourself out in the cold, for now at least.

[dthlo]

1. the condo in questions has a value greater than it's purchase price. I don't think it falls under HARP. what criteria should i look for?

2. Why is it so difficult to get a loan these days? I mean, people still purchase property for real estate investment, right? The criteria is just so demanding and property in the NYC area is not inexpensive.

[Pfhtex]

1. Home Affordable Programs has links that explain things, too much to post here.

2. The World Economy collapsed.

[Elke Mariotti]

Originally Posted by dthlo

1. the condo in questions has a value greater than it's purchase price. I don't think it falls under HARP. what criteria should i look for?

2. Why is it so difficult to get a loan these days? I mean, people still purchase property for real estate investment, right? The criteria is just so demanding and property in the NYC area is not inexpensive.

Sent you a DM.

[buckstop]

There is no way at the moment you get a better term on a non owner occ apartment under those conditions.

I wish I had better newsl