Wholesaler · West Deptford, NJ · Member since 2016 · 54 posts · 18 votes
So here's a scenario that I could use a little bit of advice with. My wife and I are currently looking at a duplex in South Jersey. If we were to make an offer, we would purchase the duplex as our primary residence, living in the larger unit & potentially renting out the 2nd unit (the famous House Hack). We currently have 4 mortgages (primary & 3 investment properties). Our plan would be to rent out our current primary home and then move into the duplex. Although we currently have 4 mortgages we do not have an FHA Loan. So my questions are these:
1) How much difficulty will we have obtaining a 4th mortgage?
2) What type of reserves or Debt-to-income will we need for the 4th mortgage?
3) Will we be able to obtain an FHA Loan, since it would be our 5th mortgage?
The reason I ask is because I hear so many people mention how difficult it is to get more than 4 mortgages through conventional financing. Any help would be great. Thanks!
@Bob Mastroianni You should be able to get a 5th mortgage as FHA. If the new property is within 100 miles of your existing residence, then you will not be able to use rent from the existing residence to qualify for the FHA loan.
@Bob Mastroianni You should be able to get a 5th mortgage as FHA. If the new property is within 100 miles of your existing residence, then you will not be able to use rent from the existing residence to qualify for the FHA loan.
If you live, work, worship, volunteer, or attend school in Bucks, Chester, Delaware, Montgomery, and Philadelphia counties over in PA ...than check out TruMark Financial Credit Union. They will let you go up to 10 mortgages.
The most common type of mortgage fraud is to buy something as a primary residence that you don't actually have any intentions of moving into.
If you want to come in with guns loaded and ready to fire in order to overcome underwriting objections and preemptively "prove your innocence," dig for your old Uniform Residential Loan Applications where you signed indicating your "intent" to move into the various properties, when applicable, and then dig up some old bills from a few months after purchase that were mailed to that address, proving that you did indeed do as you said you "intended" to do each and every time.
An underwriter with an IQ over 70 will be able to look at an interest rate on your mortgage statement, look at the date the loan was originated on your credit report, and instantly know if you purchased that property as a primary residence or as an investment property.
(Fun trivia: 4.375% in one month/year means investment property, in another month/year it typically means primary residence. We have a feel for this. If you told me 4.125% in late 2012 was an investment property, I might believe you. If you told me 4.125% last month was an investment property, I wouldn't believe you unless you proved that you paid a crap ton of points.)
@Upen Patel@James Masotti and @Chris Mason Thanks for the advice and feedback. You all gave me great info to to consider. I really appreciate it. Knowing that we have options helps to make the decision a little process easier.