If the amount you are projecting the brothers would pay is higher than the amount they can prove they have actually been paying then I would almost guarantee the difference would not be counted.
I wish I could give you a more positive and favorable answer.
If you are going to be receiving rents but you have not claimed them on your tax returns you will have a problem qualifying for a Conventional or FHA loan.
However you can use future rents with our private money
All you will need is to provide an executed lease agreement and we will help you use that anticipated income toward your debt to income ratios.
Let me know if you have a specific loan scenario you would like to go over with us.
- Jason Wheeler
Since, they pay cash and you dont declare it surely on your Tax returns, sadly but surely
dont bother with Regular Lenders.
Regular lenders want to see it deposited in the Bank, on Monthly Statements as well as declared
on your Tax returns.
Again, I hate to be the bearer of bad news, but I don't think any of the income will be allowed for use in your qualification even with a fully executed, legal contract.
I am no longer a mortgage lender, but as a Realtor I work with a wide variety of different lenders. I recently had a buyer who was a business owner. He had a legal contract that indicated a significant order for his product which would be taking place in the near future. Given the nature of his business, it was simple to correlate the amount of income which would be generated by this already signed (but not filled) purchase order. The bank would not consider that "Projected Income" towards this buyer's qualification. The key ratio (as you probably know) is going to be your DTI or Debt to Income Ratio. Currently, lenders I am familiar with will only base your income on historical figures and not future projections regardless of how certain You or I felt the future income was.
The exception to this would be with a private money or "hard money" lender. The problem with this type of loan is that the interest rate would be ridiculously high.
To take advantage of today's incredibly low rates with a conventional or government insured mortgage loan we would have to find an alternative solution. It's very possible that one may exist, but it would require a more detailed analysis of your current situuation.
It would probably be difficult to prove their past payments since they always give me cash other than to show that the amount of rent similar to the projected mortgage amount has been paid every month for the last 4 years. However, I was thinking what if we had a legal agreement for them to pay a designated amount of rent in the future. If this contract was already set up would we possibly be able to count at lease a % of this projected income into out "household income" total?
That being said there are some other strategies to obtaining a house through a real estate contract, lease option, lease purchase, etc. All of these strategies, in my opinion, require professional assistance. I would be happy to sit down with all of you and review your options.
Have a great day and look forward to hearing from you. Chris
Prudent to buy a multiple unit like a duplex or tri plex.
If you done qualify and they can't be on the loan, then it does not work.
You may qualify, buying a triplex, and using the income from the other two units.
Later, you change renters provided they are on. Month to month lease.