Posted on: 01st Nov, 2010 04:00 pm
Debt to Income Ratios and AGI Adjusted Gross Income
This is my recent experience with Bank of America; however, it can happen with any lender
I was recently denied a loan because of my DTI ratios. This would have been my 2nd investment property purchase. I believe the reason is because on my last investment purchase in 2009 I had 22,000 worth or expenses that I deducted (above line deduction’s) on my sch. E and 1040. You know..startup, repairs, cleaning, advertisement, etc... Thus, this reduced my AGI Adjustable Gross Income by 22k. I thought underwriting could have added back "one time extraordinary losses" i.e. repairs/start-up cost back into my AGI. Presently my salaried annual is around 62,000. The loan went to underwriting and… loan denied! I did not added any additional debt, i.e. personal loans, credit cards, etc…
Had I know this underwriting benchmark, I wouldn’t have taken any expenses that reduced would reduce my AGI. I did receive a nice return; however, I may have bound myself for the next year, 2011, to purchase investment properties. At this stage… the return wasn’t worth it! With interest rates as low as they are, a stifled economy, and a surplus of homes, this is defiantly the time to buy... buy.... buy! I still have my refund in full and was thinking... would it be a good idea to do an amendment for 2009, redo my sch. E and 1040 and send the refund back?? In 2011 when I sign a tax release form with the lenders will they pull the amended 1040?? I know underwriting averages the past two returns and I don’t want my 2009 coupled with the upcoming 2010 returns to drag my DTI down in 2011. I can so good cash flow with this upcoming returns (2010) Thanking you in advance for any insight!
[size=9:b8219f79d3][color=Red:b8219f79d3][Email address deleted as per forum rules. Thanks.][/color:b8219f79d3][/size:b8219f79d3]
This is my recent experience with Bank of America; however, it can happen with any lender
I was recently denied a loan because of my DTI ratios. This would have been my 2nd investment property purchase. I believe the reason is because on my last investment purchase in 2009 I had 22,000 worth or expenses that I deducted (above line deduction’s) on my sch. E and 1040. You know..startup, repairs, cleaning, advertisement, etc... Thus, this reduced my AGI Adjustable Gross Income by 22k. I thought underwriting could have added back "one time extraordinary losses" i.e. repairs/start-up cost back into my AGI. Presently my salaried annual is around 62,000. The loan went to underwriting and… loan denied! I did not added any additional debt, i.e. personal loans, credit cards, etc…
Had I know this underwriting benchmark, I wouldn’t have taken any expenses that reduced would reduce my AGI. I did receive a nice return; however, I may have bound myself for the next year, 2011, to purchase investment properties. At this stage… the return wasn’t worth it! With interest rates as low as they are, a stifled economy, and a surplus of homes, this is defiantly the time to buy... buy.... buy! I still have my refund in full and was thinking... would it be a good idea to do an amendment for 2009, redo my sch. E and 1040 and send the refund back?? In 2011 when I sign a tax release form with the lenders will they pull the amended 1040?? I know underwriting averages the past two returns and I don’t want my 2009 coupled with the upcoming 2010 returns to drag my DTI down in 2011. I can so good cash flow with this upcoming returns (2010) Thanking you in advance for any insight!
[size=9:b8219f79d3][color=Red:b8219f79d3][Email address deleted as per forum rules. Thanks.][/color:b8219f79d3][/size:b8219f79d3]
Hi amma!
Welcome to forums!
You should contact a tax adviser and take his opinion in this matter. He will be able to guide you whether or not you can return the refunds back to the IRS.
Sussane
Welcome to forums!
You should contact a tax adviser and take his opinion in this matter. He will be able to guide you whether or not you can return the refunds back to the IRS.
Sussane