I have an appointment tomorrow afternoon with a commercial loan officer and want to be as prepared as possible so as to not shoot myself in the foot.
Here's my situation:
I am in the middle (in underwriting) of buying a new home. My current home will become a rental once I close and move out. I currently own (sub2) 2 other residential properties that are currently rented out. I am meeting with loan officer about financing a small 6 unit apartment building.
My goal is to voice my stance on moving forward after underwriting is done on my new home. My concern is in regards to how they will view the sub2 properties. Will they see them as outstanding debt, or since the seller is legally liable for them would it still viewed as his debt?
Further, since my name is on the deed, can I claim the rental monies off them? And finally, will it look to them as the properties are paid off since deed is in my name and there aren't any loans out for them in my name? Or should I just ignore them altogether as if they don't exist for the purpose of this new loan?
Sorry for the train wreck rant, just want to make sure I get all details out there so I can get some good advice.
Short answer is if you do not have loans in your name for those properties they will not count towards your debt/income, however you can claim the rental monies if you can show proof. Also, they will actually be viewed as assets since you technically own the property without a loan. Hope this helps.
Awesome, thank you!
@Jay Gilkey is right on viewed as an asset, and the lender will ask you to fill out a personal financial statement (PFS); so they will see it. Its not going to hurt you.
In filling out your personal financial statement, you are required to both list the subject 2 properties as assets (as you do own them), and also list the debt against the property as a liability, although you can indicate that you are not liable for the debt. Yo list only the asset and not the debt would be falsifying your financial statement by providing a greatly inflated net worth. To leave off the debt is mortgage fraud. Please be careful about accepting off the cuff answers from people who lack knowledge in the business.
@Don Konipol : just keeping it short but I meant the whole thing; since you don't read between the lines
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