All Forum Posts by: Chris Mason

 As "the market" gets more and more sure we're about to have a recession, you will see the higher risk "alternative documentation" loan types have their pricing reflect.

You can swap fees for rate, rate for fees. The fees are the minute hand, the rate is the hour hand. 2 hours and 60 minutes, and 3 hours, on the back end, are identical. Though one might read as a lower rate and more points, while the other reads like a higher rate with fewer/no points. 

 Vanilla Fannie lends to non-citizens with an ITIN, not even a special loan program. See here: https://singlefamily.fanniemae... 

If you're using ITIN as meaning "undocumented immigrant," that's of course a different story, and an odd choice of words. :)

You also aren't going to randomly google "best house for sale" and find one that cashflows at a 14% CoC ROI at the tippy top of google, but I did indeed just google "best publicly traded REIT" and found precisely that. I'm guessing if we did a deep enough analysis, we'd find that markets find equilibrium, making it a ballpark wash.

I finally found some decent quality academic research on FSBO v Realtor/MLS. "Shocker," the FSBOs sell for a bit less, and an even bigger "shocker" is that it's almost exactly a wash with realtor commissions. Markets find equilibrium. It's a total wash, on average (FWIW I still list with a realtor, simply because they could knock out in 30m - at no additional cost to me - what would take me a few hours).

The advantage of a specific syndication is the same as the advantage of a specific investment house purchase. You can do a decent amount of work to find a syndication that you believe is likely to outperform the market, and you can also do work to invest in individual houses and achieve above average performance. And that's the same thing with FSBO v Realtor, if you're going to do the work to be the best FSBO ever, you will have above average performance, and if you pick a rockstar realtor, you will have above average performance there too. The cat is skinned either way. If congress passes some tax cut for something over here, or increases taxes over there, the prices will adjust to reflect, as markets find equilibrium.

 Step 0, confirm that it's an assumable loan. Very few are.

Step 1, call their loan servicer and say you want to assume it.

REITs are a practical workaround, FYI.

To pick a random REIT that you can buy individual shares of stocks in, consider NLY.

Has paid out $0.22 to $0.30 per share, per quarter, for some time. Each share sells for $6.27.

$0.22 * 4 / $6.27 = 14% ROI just on the dividend. That's your cashflow from rent, more or less. "Cash on cash return on investment."

And if those shares happen to go up in value, that would be additional profit on the back end when you sell your shares, analogous to selling a rental property after it's gone up in value. It also may go down in value, and indeed it is currently trending down. 

 This answer is factually correct and comprehensive. 

The conventional 5% down duplex option is a bit of a "am I in the goldilocks zone for income?" hunt, though. 

 GR is a big mortgage bank. Lots of good people there. They have a generally positive reputation within the industry. 

Naturally, as we used to say in the Marines, there's always "the 10%" that can make any organization look bad. But if you're a reasonably intelligent person, you should be able to sniff out if you're working with one of those folks, and move onto someone else. 

Also, critically right now, they aren't a "refi sweat shop" or a "tech company disrupter" that got overly large during the 2020/2021 refi boom. So they aren't about to lay off 40% of their staff (including, naturally, the operations person who knows how to do the thing that you need to have done for your closing to happen), as many of the "tech company disrupters" (who are only ever able to function during a refi boom, time and time again, what has come to pass before is coming to pass now and shall come to pass again, so say we all and amen) are presently in the middle of doing as part of the normal interest rate cycle. That's a huge threat right now, but not for a place like GR.

Good luck!

 But it doesn't take two weeks to get preapproved. It takes a couple days. Very straightforward a->z process. And due to everyone increasing capacity to deal with the refi boom (the steps to start a refi, and the steps to get preapproved, are essentially identical, improvements in one area automatically carry over to the other), it's probably more straightforward, easier, more automated, etc, than it was in 2019 (my pre-covid "tech stack" that was more or less 2012ish technology that was "good enough" and "the way it's always been done," has been entirely replaced, for example, because we suddenly had to deal with 5x the volume, and moving to current technology was cheaper than hiring 5-10 new people).

In general, loan originators are being more responsive right now, not less. Volumes are low because the refi boom is over. If multiple loan officers are being flaky and non-responsive, at a moment when on average they/we are being more responsive, the common denominator one way or another is you. Again, just being blunt here. 

It's also possible that you rolled the dice and random chance has them coming up snake eyes over and over and over again. Improbable things happen, not necessarily the fault of the person rolling the dice.

 You're seeing folks being flaky because you're wasting time. 

We are in a rising rate environment. If you're taking 2 weeks to "shop around," all that means is that whomever quoted you honestly two weeks ago is the winner, because rates were lower two weeks ago, not because of anything else. You aren't even in escrow, you're just a window shopper, to be frank. 

The way to get the lowest rate and fees, right now, is to go into contract ASAP. Every day you wait, rates are going up, and the spread between this week and that week is significantly larger than the spread between any random couple of lenders.

Focus on what matters - getting into contract as soon as possible. The sooner you do that, the better a deal you will get on the mortgage, automatically. And, more than likely, you get ahead of some California COVID appreciation as well. 

 I'll usually go over the numbers and math with someone, after I have paperwork in-hand, and where those numbers came from. The guidelines are over 1000 pages long, so no it's not realistic to go over "all" the income calculations with zero paperwork in  hand. But, after filtering out tire kickers (via who did, and didn't, provide paperwork), I'm typically happy to go over that subset of the 1000 pages that's applicable to the particular person in question. 

Your question is a version of:

"I'm sick. I need a doctor. But I don't want to go to a doctor until I know what I'm sick with, and what the right medicine is. How can I accurately figure out what I'm sick with, and what the right medicine is?" --- you go to a doctor. The good news is that you get to pick the doctor. 

 Speaking of which, back when Web MD came out, a bunch of doctors were concerned that it would put them out of business. Not the case. In fact, it put so much semi-accurate and accurate-but-misunderstood information out there that it mostly just confused everyone, and before you knew it the "ear nose and throat" doctors had more business than ever before because suddenly everyone with a sunburn thought they had skin cancer, every stubbed toe was a compound fracture, and so on. Is anyone reminded of anything a little closer to home on this very forum? :P