Refinancing Rejection Due to Disability Insurance

[Rassan Sampson]

I'm trying to refinance a property in Detroit with a conventional 30yr and the lender is on the verge of denying my application due to my DTI. For some reason they refused to use my annual salary to calculate my DTI and instead used my YTD earned income. The problem with that is my YTD earned income doesn't include disability insurance income from 2 weeks of surgery recovery. All of this is shown on my paystub, I've been back at work full time for a couple of months, and I've tried to explain this to them. Has anyone had their mortgage application denied from using short term disability insurance before applying? Is there a norm around this or a legal precedent?

It seems odd to be rejected based on a temporary injury.  I know the immediate reaction is to find another lender but I have a rate locked that's unmatched from any lender I've talked to.  I also think there's a small chance they made a mistake and their trying to find a way out of honoring their locked rate.  Looking forward to hearing other's experience with something like this, thanks,

[Harjeet Bhatti]

@Rassan Sampson If your YTD income was lower because of short term disability, the lender can ask for written letter from your employer or sometime client can provide proof. That should resolve the problem. I would say reach out to right source and provide everything in written form to the lender.