My wife and I file tax report together and we are thinking to take conventional loans individually w/ the hope go beyond the limit of conventional loans. The questions I have are:
- Banks can see all our rental records when checking the tax report, will they apply 10 loan limits on us combined, or they treat us separately (so 2x limit in this case)?
- When computing DTI, will banks take all the loans as cost (since they get it from the tax report) or they only consider the loans under my name as debt when I am applying for new loans?
Thanks for help!
Since you file tax return together, bank lend maximum of 10 loans to both of you together.
Unless you and your wife file tax separately for at least 2 years "AND" both of you do not own any property jointly together.
That meant, all the properties must be either own by yourself, or own by your wife herself.
Then the bank would lend 10 loans to you, and 10 loans to her. Total of 20 loans.
If any one of the properties is owned by both of you together, sorry, maximum 10 loans to both of you together.
Thanks Cathy. Does that mean the loan limit is decided by tax return instead of credit report?
Each single entity can have maximum of 10 loans.
If you and your wife file tax together, both of you are considered "one entity".
If you and your wife owe any property jointly, it is hard to separate the financial from you and your wife.
The only way that, husband can get 10 loans and wife get another 10 loans, if and only if both wife and husband are financial independent for their assets include both tax return and all properties.
A joint title on any property, it would make the lender to treat both people be "one entity" instead of "two entity".
Credit report is still needed to be satisfied for part of the loan requirements, like credit score.
What that means is, you and your wife need to separate all the accounts under your individual names for at least two years before you apply maximum of 20 loans in total.
Hope it helps answer your questions.
That's pretty clear, thanks Cathy!