Updated about 7 years ago on . Most recent reply
Mortgage lending if you show heavy depreciation / deductions
Hello,
I currently have 4 homes that I rent. I live in my 5th ...this one has 50+K of equity in it. I found a great deal on a foreclosure and fell in love with it. I tried to get prequalified (without selling my current home yet) and things were looking good until my 2018 tax return was finished and the lender saw it. Suddenly my DTI was over 50% and I was out of luck. I depreciated all of the houses and wrote off lots of equipment and vehicle expense. This worked great for my taxes - but now is keeping me from getting the house I want.
The plan was to get approved - grab the new house and move in. Then sell mine and take the profits and pay off one of the other loans - which would put me in much better financial shape.
Has anyone had this happen to them before? Have any good advice on how to get around this?
Thank you.