Real Estate Investor · Weehawken, NJ · Member since 2017 · 23 posts · 29 votes
Hi everyone.
I'm under contract for buying a house in North Jersey. It is a 2-Family and I'm going to use one of the units as primary residence. I have perfect credit and can put a 20% downpayment. But the income info I can show for the past 2 years does not make me qualified for conventional loan.
So I'm looking for my best option. I prefer not to do this through a broker. Ideally if I find a small local bank who can work with me it would be great. But I'm open to any other options that would not make this deal much more expensive than it should be.
Lender · Charlotte, NC · Member since 2022 · 739 posts · 410 votes
4y
Hi @Edo Y., there are a few products that might fit your scenario.
1. Net rent. This is for clients that do not qualify because they have other rental properties that hurt them on their Schedule E. It takes a more investor-friendly approach to calculate income. It generally has better rates than DSCR but higher than conventional.
2. DSCR. This is where you are qualified based on the income generated by the property. Not your personal income.
As for a small, local bank, they might have different products that are more well-suited to you. Unfortunately, I do not have any referrals in Weehawken, NJ.
DSCR is only about 1% higher in rate than conventional (less so with perfect credit) so even with that option, you would not be dramatically more expensive than it currently is.
Hope this helps! Let me know if I can be of any assistance.
Lender · Nationwide Lender · Member since 2015 · 1k+ posts · 814 votes
4y
@Edo Y. Based on your post, I am assuming that you are self-employed. Given that your reported income will qualify you for a standard loan, you other option is a non-agency bank statement loan. You can't use investor solutions suggested by others, as those are for an investment purchase, and you are buy a primary residence.
Hi @Edo Y., there are a few products that might fit your scenario.
1. Net rent. This is for clients that do not qualify because they have other rental properties that hurt them on their Schedule E. It takes a more investor-friendly approach to calculate income. It generally has better rates than DSCR but higher than conventional.
2. DSCR. This is where you are qualified based on the income generated by the property. Not your personal income.
As for a small, local bank, they might have different products that are more well-suited to you. Unfortunately, I do not have any referrals in Weehawken, NJ.
DSCR is only about 1% higher in rate than conventional (less so with perfect credit) so even with that option, you would not be dramatically more expensive than it currently is.
Hope this helps! Let me know if I can be of any assistance.
Property Manager · NJ · Member since 2017 · 786 posts · 396 votes
4y
@Edo Y. A DSCR loan is a great way to go, but you may actually want to go through a broker of non traditional loan products (I know you don't want a traditional broker) they usually have a bevy of options for you including a product that closes quickly given the fact that you're currently UC