Athen Apaquette

Client turned down by underwriter because of too much tax write off, even though he is a salaried engineer! This often happens when underwriters, who have to look at 4-7 profiles a day, make a technical mistake.

(My client is an engineer buying a home to live in as opposed to a rental investment property). He is an engineer, but because of traveling for the job last year, he spent more than his per diem and therefore wrote it off, to the tune of 25% of his income. In the past, underwriters would have to deduct that from salary income to qualify. The idea was that you spent the money to make the money. In reality, it was often overzealous tax preparers trying to save the taxpayer money.  So if you made 80k but wrote off 30k, that meant you qualified on the left over $50k.  Not good news for most people.

Good News: in September Fannie Mae changed the rule and said that if you don’t earn more than 25% of your income from bonuses or OT, then they will no longer deduct that writeoff from the qualifying income. YEAH!

And that is the change in rule that caused my client to go from denied to approved! Knowing the rules helps me advocate for my clients and being solely a referral based business allows me to take the time to overturn a NO to a YES!