After years of lurking on here, I am finally about to jump into the game. My wife and I are now in a financial position to buy a property. My parents have graciously offered to co-sign and our plan is to buy a duplex. Live in one unit and rent the other. We'll do the traditional FHA so we get in with a low amount down and then live there for the required year while fixing it up and then buy and move into our next Duplex.
My wife and parents will be the ones on the mortgage for this first property as I just started a new position this week. This position is 1099 for the first 6 months and then it transitions to W2, so the income wouldn’t qualify.
My question is can I qualify for FHA when buying our second property if I'm not on the mortgage, deed or anything else associated with the first property?
Also, how do folks finance properties beyond property number 2 if you don’t have the cash upfront? As there is only so much banks will lend to you.
Is the best strategy after property number two, to buy with private money and then refinance the property within 6 months? Is it easier to refinance a rental property? Does the bank count the rental income along with property value when looking at a refinance?
Any insight would be great thank you!
Rental income will be asked but appraisals will be based on comps for less than 4 units. If you have any quirks with income or assets or anything unusual save your time and go with a local bank. I threw them paperwork on mine for almost a month and after appraisal and all they came back and I missed debt to income by 1% after resubmitting info over and over. I did finally get a refund on my application fee. :)
I'd suggest going local and starting the process with someone in the area if you believe that's where you'll invest.