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why would the PMI company not approve your loan?

We have been fully approved for the actual loan itself, but the PMI is causing us such a headache. They are saying that because my husband had such a large tax write off from his previous job last year, around $5,000, that the PMI people are thinking we actually have an annual debit of $5,000...which is not the case. He had purchased all new tools for work that year. Now they might not approve us. Is there anything else we can do?
  • September 07 2012 - Corona
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Answers (3)

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I understand the way PMI works and why they require it but they are trying to use that $5,000 write off in our debit to income ratio! So that's what the issue is. Also, it's a conventional loan. We might end up switching to FHA if this doesn't get approved but the sellers might not want to wait for us. It's just very frustrating when we have done everything right and this tax write off might prevent us from getting the home
  • September 08 2012
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I think in your case PMI is needed because your downpayment was not sufficient (20% or more).

Ask a local loan officer to see if they can work out a 80-10-10 loan for you. They'll explain what it is and how to get rid of PMI completely.

Raheel Shahzad, Attorney, CPA, Real Estate Agent
Lombard, IL
  • September 08 2012
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Ask the lender if they didn't have an issue with qualifying income why is PMI company? Both should calculate income using same guideline/method. Also ask if they can send it to another PMI company.
A $5K write off for business expense for purchase of tools should have also included depreciation, which can be added back to your income.
  • September 08 2012
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