SCENARIO: Borrower was purchasing a multi-family property for investment purposes. He was a sophisticated investor, already owned multiple properties, and he was self-employed. This borrower owned and operated multiple companies and received income from twenty different entities, all which filed tax returns every year. This borrower felt he was a high-income earner. His credit was excellent. Plus, his investments and real estate was worth close to Fifty Million Dollars! Purchasing another investment property should be a walk in the park…shouldn’t it??
PROBLEM: This borrower went to ‘His Bank’ to obtain the mortgage. He was VIP at this bank and his banker assured him a loan approval would be forthcoming. The loan officer requested tons of documentation from him, as well as from his CPA. Weeks went by. To his shock, his mortgage was denied!
The realtor recommended a local mortgage banker. Their loan officer “salesperson,” overwhelmed by the twenty different entities and tax returns (not to mention his inability to read them), and recommended a mortgage that only utilized market rent on the subject property to qualify. “Sure the rate is much higher; but you won’t have to provide all that paperwork!”
Unfortunately, the property’s cashflow at this higher rate was questionable at best. The purchase did not make sense unless this borrower could obtain a conventional rate.
DIAGNOSIS: The borrower’s Financial Advisor recommended he speak to Warren Goldberg at Mortgage Wealth Advisors.
SOLUTION: I gathered ALL of the borrower’s documents, including the tax returns from all of the entities this borrower owned. Traced all revenue and cashflow through each entity tax return and back to his personal returns. Added back those accounting write-offs (such as depreciation) that lowered his taxable income, yet not his qualifying income. Then documented it all for the underwriter to avoid the same issues this borrower experienced when he went to ‘His Bank.’
RESULT: Mortgage Approved with a reasonable interest rate. Loan Closed. Subject Property providing healthy cashflow for the new owner. A very impressed Realtor and Real Estate Attorney. And a new raving fan who will NEVER go back to ‘His Bank’ for a mortgage ever again.
BOTTOM LINE: Most mortgage loan officers out there are simply salespeople, happy to tell you what you want to hear to ensure their commission. Most can’t read tax returns. And if you ask them how the mortgage they are selling will effect your cashflow, provide tax benefits, and help you build wealth, all you’ll get from them is a blank stare.
Only entrust your mortgage to this Certified Mortgage Planning Specialist® who will ensure your mortgage fits your budget, complements your financial plan, and helps you build wealth over time.
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Warren Goldberg is President of Mortgage Wealth Advisors, a Certified Mortgage Planning Specialist®, and a published author. His interviews include Blog-Talk Radio, Newsday, The Daily News, Anton Press, and the Long Island Herald. Since 1992, he’s been sharing his financial knowledge and wealth-building strategies, including how to properly use your mortgage as a financial tool. His clients regularly express their trust and appreciation by recommending friends and family call when in need of mortgage, real estate, and financial guidance.
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