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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: crazy30 on October 02, 2015, 07:03:22 PM

Title: How AGI affects mortgage application
Post by: crazy30 on October 02, 2015, 07:03:22 PM
i posted in this thread before if we should max out our 401k while saving for investment property. Here is my concern: if we max out our 401k, hsa, roth plus mortgage interest deductions, our agi would be significantly lower! Would this lessen our chance to get approved for investment property?!? Ps if my question is stupid, please forgive me! Thank u
Title: Re: How AGI affects mortgage application
Post by: wwweb on October 03, 2015, 07:13:04 AM
As I understand it, banks look at your gross income when you apply for a mortgage. Lowering your AGI should have no impact on the calculation.

It looks like the internet agrees with me -
http://finance.zacks.com/bank-use-taxable-income-gross-income-determine-qualify-loan-4601.html
Title: Re: How AGI affects mortgage application
Post by: Eurotexan on October 03, 2015, 08:41:15 PM
I am currently refinancing one of my rentals and this issue came up. It's definitely not a deal breaker nor a reason not to continue to reduce your AGI as much as possible. A good mortgage broker will delve in deeper and won't punish you for maxing out your deductibles. It is a great question though!
Title: Re: How AGI affects mortgage application
Post by: crazy30 on October 03, 2015, 10:26:34 PM
Thanks guys! (Whew! Relief!)