What is my best plan of attack

Question

I own tow SFH both with mortgages. I also own a business and the building has an apartment above it so I don't have a home mortgage per say.

I plan on buying more homes but being a new business owner the banks wont touch me so I am going to have to wait for contract deals to come along..

My thought is to pay down on one of my two rentals but I am unsure if that is my best bet.  Owning a business wont the rentals play into my tax savings? Will paying a house off hurt more than help?

Please give me some suggestions.

Steve Babiak · Answer

Owner occupant loans usually get a lower interest rate.  They usually require at least one year of being owner occupied; though there are some owner occupied loans that require you live the entire term of the loan.

Travis Elliott · Answer

I have decided to pay off my truck instead of paying a house down.

Why do you suggest living in a home for one year?

Chris Chong · Answer

Hi Travis, I've had a similar situation.  Long story short, I was previously a high paid employee, started a side business, it took off and I'm making the same amount of money and in the same industry... but now banks want me to wait 2 years before they will count my income.  I already have 1 rental and my house.

You DON'T want to pay down your rentals.  You want to have as much cash as you can sitting in the bank, because they WILL require 20% down for your next rental.

Plus they are going to want to see 3-6 months worth of ALL your payments sitting in an account for "reserves".

If you have 6-9 or 1 years reserves that's even better.  They start to overlook other things when you have enough cash to last for a year.

The best thing you can do is tell them you intend to move into the house you are buying and do so, then leave after 1 year.

Its way easier if you can live in the place you are buying for a year, then move out and get another property.