All Forum Posts by: Daniel Hennek

Denise, 

Around here in the Montezuma County area, Cortez/Dolores/Mancos, there are many properties that don't qualify for traditional agency mortgages. Meaning FHA, VA, USDA, or conventional. So, if you're going to be using a mortgage to do this you'll have to narrow your search somewhat. I have a bunch of other investor contacts in the area so I can offer information on a variety of difference situations if I know more about what you're trying to do.

Dolores is a good place to invest if you can find a property available.  They had an appreciation rate over 7% last year.  Mancos and Cortez are slightly less desirable for an investor though I've helped a few clients buy investments in Cortez this year and they are happy with them.  Pagosa is definitely a good area.

What kind of investment are you looking for?  A single family home to rent?  Multi Family?  Apartments?  I'm always happy to help people navigate the real estate world so feel free to reach out anytime for a casual conversation.

 Chris,

Your lender knew you were doing this? And they knew your GC was basically just a proxy?  How exactly did you play this with the lender?

Hard to do anything at $40,000.  You're probably going to have to wait until you have at least 12 months under your belt of 1099, and possibly 24 months depending on how hard Coronavirus continues to hit us.

Keep checking back with small lending institutions like community banks and credit unions.

Maxed out revolving debt is a big hit on most credit scoring models so that is definitely going to contribute to a score drop. However, it's interesting that one score is up and one is down.  A good lender can use re-score software through their credit vendor to see what paying down any revolving debt might do to a score.  

In a master bath 2 sinks get used very often unless you're single.

Can you put in a pocket door?

Can you post a picture?

 They only use the lowest if only 2 scores come up on the tri merge credit report.

When all three scores show up they use the middle score.  It's not often that only 2 scores come up

There are adjustments for credit scores every 20 points on conventional loans. FHA loans don't adjust based on credit and neither do VA. Most non-agency loans will also adjust similar to conventional loans.

Investment properties are bought with conventional or non agency mortgages so there's going to be an adjustment based on credit score for them without regard to purchase or refinance.

Talk to a lender in your area about your specific situation and shop around.  You're going to get a lot of different answers here from people that don't have much experience with mortgages and when you give your info to an actual professional they can give you accurate information without guessing.  

FICO stands for Fair Isaac Corporation.  It's become a standard for referencing credit scores but it's a credit model.  TransUnion, Equifax and Experian are the 3 major credit bureaus. They provide information and a creditor or credit provider runs that information through their selected scoring model/s.

Now a days there are many scoring models used. Different banks or lenders will use different models.  Some of them weigh debt to limit ratios differently but 50 percent is a good rule of thumb.  The hit will typically be much bigger at 70 percent then again at 90.  Secured is also different than unsecured revolving.

30 percent debt to limit on a HELOC isn't going to make someone's score plummet. Many scoring models understand mortgage debt and don't usually treat it exactly like revolving. It will affect the score, but not a significant amount. However, some see twenty points as a "plummet" so it's subjective

 Unsecured line of credit? 

The credit hit is about the ratio of debt to limit. The closer you are to the limit the bigger the hit.

Can you get an increase? Increasing the limit and keeping it as close to 50 percent of the limit will help in the credit score hit.

Type "mortgage calculator" into Google.  Calculate the actually increase.  On a $200,000 mortgage a 1 percent increase will increase about $115 from today's rates. 

Rates have been below 5 percent for a long time and it's unlikely they're going above that anytime soon.

Most renters don't care about the age of the property. They care about what they can see.