I have some questions regarding applying for a new mortgage . I currently have 4 properties (3 rentals and my own property). ONe of my properties is paid off, Without getting into too much financial information, I currently have my regular job of $100K. Part of my income is taxed and part is nontaxed. I would lke to purchase another property but have been turned down twice now and am working with a third lender. My credit score is over 800, I have $2500 left over after paying all of my mortgages, have maybe $200/month of credit card debt, a student loan and that is about all for debt.

And to top it off, my coworker told me that the lender she is working with is unable to include her nontaxable stipend (some do, some don't). that would make her annual income roughly $72K.

And to top it off, my coworker told me that the lender she is working with is unable to include her nontaxable stipend (some do, some don't). that would make her annual income roughly $72K.

I feel your pain in this economy dealing with rentals and trying to by another property with a new mortgage. There are many tricks dealing with Banks, Savings and Loan, Lenders and Investment Corp who lend hard money.

You have to create a Financial Sheet Showing, with documents (like your tax return with the Profit and Losses of each rental). Allow for a 25% discount from your bottom line. Example, your three rentals bring in $6,000 rent, but your mortgage, taxes, insurance, gardener & repairs comes out to $4,200. Your Net Profit is NOT $6000-$4,200. It is

$6000 x 75% (15% for repairs and 10% for vacancy) this an income of $4,500 less your rent net income of $4,200. This means on your best day your Real Estate bring in $300 positive income.

Then your personal income of $100,000, less taxes and retirement savings comes to $$65,000. This your living expenses (medical, auto, insurance plus food) is $30,000, your personal spendable income is $35,000 a year or $2,900 a month.

Add the real estate income of $300 a month plus your $2,900. You have a $3,200 positive income, so long as you have no issues.

Now deduct the cost to buy and run another rental... And you are scraping the bottom of the barrel.

Unless your real estate is worth $250,000. You have $150,000 in savings and $75,000 in retirement-- you over extended in the real estate world.

Wow Marcia, that's great, you are one great planner when it comes to finance. One item to compare, your total net worth, less your liabilities. Example, you may be worth 1M, but what is your total mortgage balances, credit cards, student loans etc.

I don't recommend this, but sometimes you will find an establishment like Rocket Mortgage (some company not tied to the the FDIC or Banks), a private lender. They sometimes have programs where they will combine your total investment mortgages into a product -- pay off all of your other loans and only deal with them.

The income in your rentals doesn't count as 100% income when they use it for the next loan.

If the loans you currently have are government backed (USDA, VA, FHA) they will credit you with 90% of that income.

If the loans are not government backed, then you only get 75% credit for that income.

I wrote a thread a few weeks ago on this topic. The banks have pulled back their lending, especially with investment properties. I've had a number of guys and gals I have mentored over the years tell me they are no longer able to get investment loans, HELOCs, or cash-out refinancing from the banks they have been dealing with. In short, the banking industry is getting tense that there will be some economic pull back which would cause high loan to value properties to go underwater and/or lead to negative cash flows.