All Forum Posts by: Mark F.

@Matthew Christian If the fixed rate makes it easier to sleep at night knowing the PI payment is never going to increase, it might be worth it. Variable rates have been very good recently, but you are gambling with the future at bit. Ten years down the road, rates could be much higher than they are now. If you plan on having the loan a very long time, it would probably be best to go with the fixed rate since they're at historic lows. 

@John Hixon

I wouldn't buy a house I couldn't see, but I might be tempted to write up an offer as long as I had a very big out in case something popped up I didn't like before closing. However, if this lady is demanding that you not only offer, but close on this property without seeing it, I would drop this like a bad habit. You have no idea what could be lurking inside the house that could cost you a ton of money later. 

Also, does the lady have a signed lease with her tenant? If so, then you can't just kick the tenant out after buying the house. You inherit the lease. Might be worth asking to see if she's just using that as an excuse to hide something from you or that's a legitimate concern. Anyway it goes, don't buy unless you can thoroughly inspect that house. 

@David Pearson

A traditional mortgage is done under your own name. If you're looking for a 30-year loan based on your credit, income, and assets, and lent under your own name, a traditional 30-year fixed mortgage is probably what you're looking for. It's going to be secured by the property though. 

If you're looking for an unsecured loan with a 30-year payback in your own name, I don't know anybody who does that. 

@James Marie

First of all, for FHA you have to live in the property to get financing on it. Second, the down payment can't be borrowed, but it can be gifted. The key is to document the gift properly so you don't run into any issues with the underwriter. 

For one of the best explanations of how to properly document a gift, check out the following link (not my site):

http://themortgagereports.com/2669/downpayment-gif...

@Nyeisha Jones

Great comments from others here. I would also add that you probably want to start making offers ASAP. No matter what else you do, if you're not making offers, you're not going to create success for yourself. If that seems a little intimidating, see if you can link up with somebody more experienced who can help you. There's lots of great people on BP who are willing to help.  

@Mike R.

I personally do 6 months of expenses, but whatever makes you sleep fine at night should work :).

@Julian Dangerfield

Actually, loan officers aren't trying to keep people from getting financing (they typically only get paid when loans are funded), it's just that they have to comply with guidelines that are set far higher than their bank's underwriting department. Most traditional mortgage financing today ultimately comes from Fannie Mae and Freddie Mac, so lenders underwrite to those guidelines. If the loan doesn't fit in that box, it doesn't get approved and funded. 

The exceptions are portfolio lenders who keep their loans on their books instead of selling to Fannie or Freddie. Often these banks have more guideline flexibility, but this is a less common source of financing. 

So it's not so much about "impressing" a loan officer as it is just meeting the lending guidelines. Good credit (740 and above), stable income from job or business for at least the last two years, low debt, and a down payment of at least 25% for an investment property are the typical base requirements to get approved and get a good deal. 

@Blake Dowe

If you're planning to live in the property, FHA financing is totally doable, and you can even use leases for the other unit(s) to qualify. However, you'll still need to document your own income. FHA will still want to make sure you have enough of your own income to cover the mortgage payment, property taxes, mortgage insurance, and homeowners insurance without taking into account the rental income. 

See the following from the FHA lending guide (key statement in bold):

The rent for multiple unit property where the borrower resides in one or more units and charges rent to tenants of other units may be used for qualifying purposes. 

Projected rent for the tenant-occupied units may only be considered gross income, after deducting the Homeownership Center’s (HOC) vacancy and maintenance factor, and not be used as a direct offset to the mortgage payment.

https://portal.hud.gov/hudportal/documents/huddoc?...

In other words, you won't be able to qualify just on rental income, you'll still need enough income from your own business or job to cover the mortgage payment. 

@Blake Dowe

Are you planning on living in the property? FHA requires that the owner occupy the house for at least a year into the loan. It can't be strictly investment property right out of the gate.

You'll definitely need to document at least some income via W2s or tax returns, but you don't necessarily need to show two years income history if you were in college during the last two years. However, the income you're using will still need to support the new mortgage payment, property taxes, HOI, mortgage insurance, and other debt expenses. If you can't show W2s or income taxes right now, you'll probably need to wait until you can. 

Hope this helps!

How about an inflatable "friend" in the recliner in the living room (true story). Do those add to the property value? LOL.