I have a home that I purchased land contract 5 years ago from my father for $93,000. The contract was written that I would need a balloon payment at the 5 year mark which would also put me at just over 20% equity.
5 years has come, I have never missed a payment.
Estimate of home value is $120,000 - $140,000 today
However on year 3 and 4 I became unemployed and layed off due to lack of work.
Year four I went to school got certified and now make more money than I ever have, in a field where if I'm fired tomorrow I will have interviews the next day.
I now make around 8 times what is required for a refinance approval and have zero debt. I have little credit history though, 1 credit card with less than 10% on it at all times and is payed off monthly.
The lenders keep telling me the refinance looks golden until it goes to underwriting and it doesn't..... they state in multiple cases that a traditional Freddie or Fannie refinance will not go through because I have only been in this career field for 15 months..... and require 24 months....
My balloon payment is due next month, I am stumped. I don't want to go hard money because I feel I am deserving of a much lower rate. Same goes for portfolio. Though portfolio probably a little better idea.
Any input welcome!!!
Also any more info needed to give feedback let me know and I will add it......
You can do an FHA loan with stable employment of at least 1 year. The only thing that stinks about that, is FHA has MI for life or in your case, because you have more than 10% equity, the MI stays on for 11 years. The only way to get rid of it other than that is to refinance to a Fannie / Freddie loan down the road after you have 24 months or more in that line of work?
I'm surprised the lenders you have went to didn't pivot and come back with that option for you. They need to do a better job looking out for their borrowers?
@Jayson Carnahan is this a rental? Is it currently tenant occupied?
@Kevin Romines I agree, I feel like this is ridiculous. They have just been shocked based on credit score, Debt to income and 20% equity that they cant get it to go.
I live there. Planning on renting when I get next investment property in future.
If you do any kind of Owner Occupied loan, you must live in the property for 1 year. Go FHA and close on the deal. Besides, the rates are better than the Fannie / Freddie rates.
If the schooling you did, pertains to your current career, it will count towards your employment history. This lender may have overlays that are not allowing them to count your schooling.