All Forum Posts by: Daniel Hennek

Yes utilize it by NOT utilizing those CRAP terms!

4% origination and 12% rate huh...

But ooooh they have an online process that takes 5 minutes?!?!?  Sure they do, because everyone has that...we're in 2022 not 2002.  

Run from these people.  Find a broker that works with investors.  These terms are utter garbage...If you have a 450 FICO maybe go for it...

 Here's the main link to the Fannie selling guide --> https://selling-guide.fanniema...

Here's the applicable eligibility matrix showing you minimum LTVs --> https://singlefamily.fanniemae...

You can see what the others mentioned about any investment property more than 1 unit requires 25% down for a conventional loan.  The only break is if you buy a 2 unit as a primary residence you can put down 15%.  All these banks are telling you you 25% because they must not offer non-QM loans/non conforming/portfolio whatever you want to call them.  If they're telling you 25% they are simply quoting the Fannie guide or the Freddie guide, they are the same with regards to LTVs in this case.  So, "they" don't require 25% so to speak, the loan programs they offer require it and they don't seem to offer any of the programs that would allow for a 20% down.

You can get a loan with only 20% but do you want to?  Do you want to pay a rate 1.5% higher or more?  Do the math and see what you see.

 Except that he stated he WOULD be personally obligated...

I agree with Kevin.  The risk surrounding your activities is different for a million reasons compared to the risk surrounding the activities of another investor or business owner.  How much you're holding in reserve to manage that risk is a call that only you can make.  How much padding do you want, and how much padding do you need are different questions.  Hopefully you want more than you need or you'll eventually get caught with your pants down.

We saw in early 2020 the sad fact that a shocking amount of small businesses have little to no reserves and cannot even manage a couple weeks without cash flow let alone a few months.  The fact you're even thinking about how much to hold in reserve is a feather in your cap and places you well ahead of the curve.

However, I always caution people to take what "gurus" say with a grain of salt.  Typically, they like hearing themselves speak more than they like to actually help people...If they were so good at what they were talking about then why aren't they out there doing it more instead of trying to come up with another revenue stream "teaching people"...Oh they're just so altruistic they want to spread their knowledge?  Yeah right, maybe 2 out of the million of them...

Just curious but what credentials does this person have regarding the ability to create a credible "financial forecast"?

I know you said you found an answer, but for anyone reading this that would still like one...

Getting a new job is certainly not a deal breaker for most mortgages as long as you're going from full time to full time.  It's not ideal, and can be annoying for documenting the file but it's not a deal breaker.

Borrowers can even qualify with future income provided they can obtain an offer letter outlined with all the employment terms and we can verify the start date is within 60 days of closing.

I'd suggest finding a new loan officer if they're hassling you about that because they're obviously not very experienced.

It's more like an assertion you need to make in order to receive an FHA loan. The assertion being that your intention is to occupy the property for at least 12 months. I hope that you did not make that assertion falsely. The implications are that you might have already defrauded the previous lender, not that you are prevented from doing something in the future. The new lender will probably investigate the circumstances of your previous application. There are cases where someone buys a property with the intention to live there for the foreseeable future, and then grandma gets sick 5 states away and they move to go live with grandma and take care of her before they live there for 12 months. They are not forced to sell the property and can rent it out if they wish; they did nothing wrong and the circumstances surrounding their move backs that up.

The fact that your purchase was only in October, less than 4 months ago, and you're already talking about moving out is a big red flag.  Your not talking about moving because of some life changing reason, you're talking about moving for what you see as a good investment opportunity.  A good lender, through the underwriter, MLO or processor is going to investigate thoroughly your reasons for applying for another mortgage so soon after a home purchase.  The MLO should grill you about all of this, if they don't the underwriter surely will.

What is the intent with the new purchase?  Are you hoping to purchase as a primary residence to secure a low down payment mortgage as a result of your claimed primary occupancy?  And on that application you're also going to state your intentions with the property are to occupy for at least 12 months?  What is going to be your explanation to the underwriter as to why you are purchasing another property so quickly after buying a place to live?  People don't move that often so what is your really good reason for doing so?  Other than you just want to...

You're not "disqualified" in any sense, but you are certainly bringing up a lot of red flags that any new lender will have to address.  We call them red flags because they are things that raise questions that need to be answered.  Those red flags must, by regulations, be investigated by an MLO, an underwriter, and the lending company in general.  You'd want to have a very good reason that your intent changed so drastically from just 4 months ago or the investigation could get more in depth.  

There's no specific distance.  If it's something like 40 miles plus then the underwriter will probably ask for a letter of explanation to determine how it's realistic that you are going to live in the property and commute everyday.  If your explanation includes something to the effect of "I'll only have to do this for a year because then I'll be moving out" it might not go over well.  

Simple answer is that you write a letter of explanation that is true and reasonable.

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Not once have I ever asked someone what their DTI is...