All Forum Posts by: Devin Peterson

Hello BP, I bought a duplex and renovated it too to bottom and now have it rented. I am looking to cash out refi however my current mortgage servicer has high origination costs to do the refi. I found a local broker that can do a 80-85% LTV for 1500 in origination fees which is much lower than current mortgage servicers price of 7500. My question is, is this the normal way of doing a cash out refi for a BRRRR and pay closing costs twice? Is that just the way the game works? My rate would be going from 5.625 to a 5.25 which is okay but I just money out to the deal primarily. I spent too much on the remodel so I will be leaving some money in the deal but am holding long term and the cash flow will be great once we move out of one of the units. Please let me know what I didn't think of!

I've done several of these loans with @Devin Peterson. There should not be any surprises. Reach out to him to see if he can help you. Good luck!

Hello,

My name is Leo. 

Does anyone know lenders or mortgage company providing a DSCR loan in Illinois?

I'm buying a small condo at $160k-$180k with 20% down.

Leo

Hey all. I have three investment properties Im looking to refi with a DSCR. Properties will probably appraise between 80-100k. Im running into many lenders not lending under 100k. Anyone have any products that wlll refi these smaller loans?

Well, no, the fed cut the fed funds rate which is the rate that big banks lend money to each overnight. Therefore, the Fed decides what the shortest-term loan cost will be. The market decides what every other interest rate will be. Obviously, mortgages are longer than 24 hours so there is no direct correlation between fed funds and long-term mortgage rates. (The exception to this is loans based off prime which would typically be home equity lines of credit as the Fed funds rate does affect prime)

The Federal Reserve meets 8 times a year, while the bond market which actually dictates mortgage interest rates is traded every second of every day of the year. So, if you and I knew the Fed was going to start cutting the fed funds rate, the traders who do it for a living did as well. They look forward to where rates are going to be, not where they are currently. Therefore, the reason mortgage rates have gone down 1.5%~ or so over the last three months is due to the bond market pricing in this cut and future cuts. You can bet on where you think the fed funds rate will be with Fed Funds futures contracts, and right now that market has the fed funds rate all the down to 3% by June 2025. https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html Of course, markets can be wrong, and data can change, but that is what is being priced in at the moment.

In fact, mortgage rates often RISE after a Fed funds rate cut. This can happen for any number of reasons but for example if Powell says something that seems contradictory to the above assumptions rates can pop quickly up.

That all being said, rates can still be had at this point in the 5’s for those with good credit and loan to value. Refi’s is certainly a possibility for those that have purchased in the last two years or so.

I'm purchasing an inherited home (PA) from a family member with cash, but it needs some work. How should I proceed? Should I not use my cash to purchase the house and use it towards the rehab? I know the house has equity in it, but I'm not sure how much. Please advise. 

Thank you

I recently purchased a rental property and discovered it needs more extensive repairs than I originally anticipated. If I rent out my current primary residence, I could generate over $1K in positive cash flow, so I'm considering moving into the rental property and handling the repairs at a more manageable pace. I understand there's a one-year waiting period before converting a primary residence into a rental property, but does this same one-year rule apply when converting a rental property into a primary residence.

I have another question. When I purchased this property, I used my HELOC to cover the 25% down payment. From what I've found online, there appears to be a 6-month seasoning period before refinancing, but this may not apply to non-cashout refinances. After completing the repairs, I expect that 75-80% of the renewed property value will be close to my purchase price, and my goal is simply to recoup the down payment. Would this be considered a non-cash-out refinance?

Hi all -

I have a house on the market that is not selling.  It’s priced below value, but people aren’t fond of the area, low walkability score, near a bus stop, etc.

I’m nearing the end of a hard money loan and I’m wondering if it’s possible to do a cash out refinance on a HARD MONEY loan.  Will someone lend me money to pay off another hard money loan?