In early 2015, I finally got rejected from a mortgage refinance process. It’s too bad because I literally locked in an all-time low rate of 2.15% for a 5/1 jumbo ARM. Only after two long months of asking me for document after document did Chase Bank finally deny my application.
To put things in perspective, I have never been late on a mortgage payment in 11 years, nor have I ever welched on a debt. My credit score is over 800 and I have enough liquid assets to pay off the entire mortgage I wanted to refinance.
So what did me in? Earning 1099-MISC (freelance income) for less than two years. Banks have a rule where if you don’t have at least two years worth of 1099 history, 100% of the income won’t count in their debt / income calculations no matter how much you make. Furthermore, I was only paying myself a humble salary from my online business. I told them I had the funds to pay myself much more if they wished, but they would have none of it.
My mortgage refinance experience with Chase Bank was similar to that of many people who mortgage refinance with big banks: terrible. Is there any wonder why fintech firms are growing like crazy?