refinancing with LLC losses
I’m considering refinancing my mortgage (missed the real low rates but it might still be worth it.) But my tax situation is a little weird: I have W2 income, which is the money I work for and live off, but I also own a share of an LLC and pay taxes on my share of its earnings as individual income. The LLC income swamps mine, in both good years and bad, but it’s not money I have access to or have to pay back — earnings go back into the business except distributions to cover taxes, losses have been covered by business loans. For the last couple of years, the business has been losing money (thanks pandemic) and my AGI has been negative. Is this likely to tank my ability to refinance? Have you had this problem, and if so how have you handled it?
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I haven't had this problem but we recently looked into refinancing and the options presented to us by various lenders were pretty lame. Our current lender ended up offering us a rate modification on our existing loan as an alternative to refinancing and we decided it was the best option for us to lock in a lower interest rate with a minimal fee (preserving all other aspects of current loan). Just putting this on your radar if rate modification is not already something you are looking into.