The Broker Advantage for Complex Situations
When a bank or retail lender declines a loan, they are telling you that your situation does not fit their product. They have one shelf. Their rules apply across the board, and if your income, your credit, or your debt picture does not match their checklist, the answer is no.
Brian Lacey is a licensed mortgage broker in Hampton Roads with wholesale access to dozens of lending institutions. Every lender on the wholesale market has different guidelines. Different income documentation requirements. Different credit score thresholds. Different approaches to debt-to-income calculations. Brian knows which lender fits which situation and he has 36 years of experience reading a file to know where the right fit is.
If another lender said no, Brian wants to know why before he agrees with them. Many times the reason is specific to that lender’s requirements not to the buyer’s actual qualifications. The call is free and takes 15 minutes.
The rule Brian follows
Your Tax Return Is Not Your Income.
Brian Knows the Difference.
The most common situation Brian sees with self-employed buyers and 1099 earners: they go to their bank, apply for a loan, and get declined because the bank used their tax return as their income.
The tax return shows less, sometimes significantly less because of the write-offs that every self-employed person is entitled to take. The bank sees the taxable income number and says no.
That is not the only way to document income for a mortgage. Brian has access to lenders who use the actual 1099 as the income figure because that is what the buyer actually earned. The write-offs that reduce the tax bill do not reduce the ability to pay a mortgage.
An Amazon courier came to Brian after his credit union denied his application for a $400,000 home loan.
The credit union had used his tax return as his income. His taxes showed significantly less than what he actually earned because of legitimate business write-offs, vehicle mileage, equipment, and other deductions that reduced his taxable income on paper.
The credit union looked at the tax return number and said no.
Brian looked at the 1099. That was his income.
Brian found a wholesale lender who documents 1099 income using the actual 1099 rather than the adjusted gross income on the tax return.
The courier qualified. The loan was approved. He closed on his $400,000 home.
The credit union had one set of income documentation rules. Brian had the wholesale market.
Real story — self-employed income done right
The Amazon Courier the Credit Union Turned Down
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1099 income used in place of adjusted gross income where lender guidelines allow
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Bank statement loans for buyers with consistent deposits but non-traditional documentation
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Profit and loss statement loans for self-employed buyers whose business income is verifiable
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Asset depletion loans for buyers with significant assets and non-traditional income streams
A Credit Score Is Not a Fixed Number. Brian Knows How to Move It.
Every lender applies their own credit score requirements on top of whatever the loan program sets as a minimum.
One lender may decline at 620. Another may approve the same buyer at the same score.
Brian has access to the full wholesale market and knows which lenders fit which credit profiles.
More importantly: Brian has 36 years of experience reading a credit report. He knows what is dragging the score down, what can be addressed quickly, and what the realistic timeline looks like to get from a declined score to an approved one.
Sometimes that timeline is two weeks.
A buyer came to Brian after being declined by an automated approval system. The reason: a credit score of 580. The automated system saw the number and stopped there.
Brian looked at the full credit report. He did not see a credit problem. He saw a credit picture that could be moved with specific, targeted adjustments that would change the score quickly without requiring major changes to the buyer’s financial life.
Brian made two specific suggestions. Two weeks later, the buyer’s credit score had moved from 580 to 610.
The loan was approved.
The automated system that declined the buyer did not know how credit works. Brian does. He has been reading credit reports and understanding what moves scores and what does not for 36 years. That knowledge is the difference between a no and a yes.
Real story — 580 to approved in two weeks
The Buyer the Automated System Turned Down
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Credit scores below lender overlays that can be addressed with targeted adjustments
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Prior bankruptcy, Brian evaluates the seasoning period and the current picture to identify which programs apply
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Collections, charge-offs, and late payments, Brian assesses what needs to be addressed before closing
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Thin credit files, buyers with limited credit history who need a path to qualification
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Score improvement strategy, specific, actionable steps that move scores within a realistic timeline
You Qualify for Less Than You Need. Here Is How Brian Closes That Gap.
Debt-to-income ratio, the percentage of monthly income that goes toward debt payments is one of the primary factors lenders use to determine how much a buyer qualifies for.
When the number is too high, the approved loan amount comes in below what the buyer needs. Most lenders stop there.
Brian does not stop there. He looks at the full debt picture and identifies whether there are specific changes the buyer can make to reduce the ratio and close the gap.
Sometimes the answer is straightforward restructuring that the buyer can execute quickly. Sometimes it is a different loan program with a more favorable DTI limit.
Brian works through the options and tells the buyer what is realistic.
A buyer came to Brian having been pre-approved for $375,000. The home they wanted was $425,000. The gap was $50,000 and it came from a debt-to-income ratio that was just high enough to cap their approval below what they needed.
Brian looked at the full debt picture. He identified specific debt restructuring steps the buyer could take to reduce their monthly obligations and bring the debt-to-income ratio down to a level that supported a higher loan amount.
The buyer followed Brian’s suggestions. They were approved for the $425,000 loan.
They closed on the home they wanted.
The lender who issued the $375,000 pre-approval was not wrong at that moment, that was the right number. Brian’s job was to show the buyer what they could change to make the right number different.
REAL STORY — RESTRUCTURING DEBT TO CLOSE THE GAP
The Buyer Who Needed $50,000 More Than They Qualified For
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Debt-to-income situations Brian works through regularly:
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Identifying which debts, when paid down or restructured, have the most impact on the qualifying ratio
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Loan programs with higher DTI allowances for buyers who qualify on other dimensions
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Co-borrower structures where adding a qualifying income changes the ratio
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Income documentation strategies for buyers with supplemental income that is not being counted
You Do Not Have to Fit the Bank’s Box to Buy a Home in Hampton Roads
This is for buyers who have been told no, or who expect to be told no because their situation does not fit the standard profile.
Brian works with:
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Self-employed buyers, independent contractors, 1099 earners, and gig workers whose income is real but does not show up cleanly on a tax return
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Buyers with credit scores below the thresholds retail lenders apply, including buyers who have been through a bankruptcy, a foreclosure, or a period of financial difficulty
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Buyers whose debt-to-income ratio puts the home they want just out of reach at their current pre-approval amount
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Buyers who were declined by an automated approval system that never looked at the full picture
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Buyers with non-traditional income sources, rental income, investment income, seasonal income, or income that does not arrive on a predictable W-2 schedule
The reason for a decline matters. Many times it is specific to that lender’s requirements, not to the buyer’s actual qualifications. Brian has 36 years of experience knowing the difference.
If another lender said no, call Brian before you assume that is the final answer.
Questions Brian Gets From Buyers Who Have Been Told No
My bank declined me because my tax return shows too little income. Does that mean I can’t get a mortgage?
Not necessarily. If you receive a 1099 or are self-employed, your tax return may significantly understate what you actually earn because of legitimate business write-offs. Brian has access to lenders who document self-employed and 1099 income using the actual 1099 or bank statements rather than the adjusted gross income on your tax return. Call Brian before you assume the bank’s answer is the only answer.
My credit score is too low for the lenders I’ve talked to. Is there anything I can do?
In many cases yes. Brian has 36 years of experience reading credit reports and understanding what moves scores and what does not. Depending on what is affecting your score, specific targeted adjustments can move the number meaningfully in a short period of time, sometimes within two weeks. Brian will look at your full credit picture and tell you what is realistic before you commit to anything.
I was pre-approved for less than the home I want costs. Is that number fixed?
Not always. The pre-approval amount is based on your debt-to-income ratio at the moment it was calculated. If there are specific debts that can be restructured or paid down to reduce that ratio, the qualifying amount can change. Brian looks at the full picture and tells you what adjustments are realistic and what impact they would have on your approval amount.
I was declined by an automated approval system. Does that mean a human lender would also say no?
Not necessarily. Automated systems apply rules without judgment. Brian reads the full file. A score that triggers an automatic decline may be accompanied by a credit history that a human underwriter and a wholesale lender whose guidelines fit the profile would approve. The decline from the automated system is the beginning of the conversation with Brian, not the end of it.
How does working with a broker help in a complex credit situation?
A retail lender applies their rules to your situation. If you do not fit, the answer is no. Brian has wholesale access to dozens of lenders, each with different guidelines. A situation that does not fit one lender’s requirements may fit another’s exactly. Brian knows which lender fits which situation and he has 36 years of experience making that call correctly.
Riverstone Mortgage — Hampton Roads, Virginia
Brian Lacey • Branch Manager • NMLS #13008
Riverstone Mortgage • Hampton Roads, VA • Equal Housing Lender • All loans subject to credit approval and qualification. This is not a commitment to lend. Appraisal and inspection offer subject to use of Riverstone Mortgage and a Riverstone-referred real estate agent for the same transaction. Not available in all situations. Ask a Riverstone loan officer for complete details.