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We were told our second home which our daughter pays is not considered income

Our daughter pays the one mortgage and it was counted as a debt when we tried to refinance.  They always considered it as a rental with paperwork showing it comes out of her account.
  • November 23 2011 - Galion
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Answers (7)

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along with answering Hamp's questions can you tell us if you have a written lease with your daughter that has been in place for 12+ months?

Paul
  • November 23 2011
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It shouldn't be a problem now, in my humble opinion. Read my last post.

If you don't claim the fact that she picks up the cost of the mortgage, on your taxes, as income, because it is income, and needs to be considered income now, to offset the debt, an Underwriter could get all weird about it not being on tax returns, even if you could paper-trail the fact that someone pays your debt for you. Not paying tax on it, shouldn't, necessarily, be a Mortgage Underwriters main concern, but it could be a tangent concern, and get a file TD'd. Jeez, I would hope not.

Ask the Amerisave LO if the debt cannot be offset by paper-trailing the fact that someone else pays it, and if not, why? If the answer is that you didn't report it to the IRS, call another Lender.
  • November 23 2011
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Profile picture for peanutoney

They pay the mortgage company directly with their account.  We more than qualify if it hadn't been for this which was never a problem before.

  • November 23 2011
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Mistyped How does she pay you?

How does she pay the account? By check I hope. Online, from her account, may work.

And, while i'm yapping. Call a Mortgage Broker, or someone else, and ask them how they would handle this. It sounds like potentially overzealous underwriting, or an inexperienced originator.
  • November 23 2011
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Proving she pays the debt, with 12 cancelled checks, should offset the debt, which is what you do to offset a co-signed debt. This may not be allowed in your case, but I don't know why it wouldn't. Amerisave can have some naive staffers, in my humble opinion. It is like Amway of mortgages.

How does she pay you?
  • November 23 2011
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Profile picture for peanutoney
I was told by Amerisave it doesn't matter if she pays it out of her account for the past 3 years.  They said we are on the loan.  She just pays the mortgage amount, taxes and any repairs.  We don't make any income off of it but we didn't need it counted as income.  But when they count it as a debt it disqualifies us with a credit score average of 755.
  • November 23 2011
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If she pays the mortgage amount, you lose 25%, when applying for a mortgage, if it is being considered as a rental. Lenders assume a 25% vacancy rate on rental properties. You could possibly just prove she pays the mortgage, by producing cancelled checks, or potentially some other evidence, that would simply offset the debt, which is different than saying she rents the house, from you.

How is it treated in your tax returns?

Are you being told you don't income qualify for a refi?
  • November 23 2011
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