All Forum Posts by: Diana Muresan

@Josue Rivera forgot to ask you if this is an owner occupied or investment? If is an owner occupied then you could also also the the purchase with the renovation loan with only 3.5% downpayment. Just need to know more details like purchase price and renovation costs, County where it is and occupancy 

@Chris DeMello you funny, you keep mentioning you are from Hawaii like Hawaii is a different country, it is only one of the 50 states when comes to financing. And I do work in all 50 states, we are federally charrted which is extremely rare for a mortgage company. 

I sure hope that's a short temporary strategy, HELOC is just like a credit card. Equity lines, Helocs and arm products were very popular before the recession, not so much now. I've done mortgages since 2000 and I was in my early 20s back then I could care less what products clients were getting, I was too young and immature. Now things are different, clients are more educated and I am older, more matured and I have strong ethics, briefly, I haven't done a Heloc or equity lines in years, and Only couple of arms on jumbos, people are no longer interested in these programs, on Heloc in particular one must be very careful as your house is used as a collateral. That should tell you what the consensus is. FYI, Heloc interest rate is no longer tax deductible starting 2018. This is my last post on this matter as it sounds more like a banter and is not constructive, nor productive.

None of the renovation loans require you to hold the loans, that’s absolutely not true, it is false!!! That’s not allowed on the conventional market. I refinance them myself after 6 months once repairs are done if they build 20% in equity so we can get rid of the Mortgage Ins, that’s in case you want to hold on it, otherwise you just sell it. Bankers loose their compensation if a buyer refinances after making less than 5 payments on the loan which is not the case on the flipper either since you need time to get permits, do the work and finally sell it. 

FHA 203 k is for owner occupied, many buyers use the loan and Sell after repairs, obviously no one lives in the unit during the repairs and mortgage payments are actually rolled in the loan during the construction, so technically is owner occupied by is really an empty unit during construction and you are free to sell after.

It's just a matter of figuring out if you can do. FannieMae HomeStyle or a 203k FHA.

Let me know if I can assist you in any way

@Shmuel Waldman. You are very welcome. 

@Chris DeMello yes, I know Heloc is, I am a mortgage banker since 2000!

You didn’t explained it well in your initial post, you made it seem that you you kept your initial mortgage and had A Heloc in first as well which is not possible. You didn’t mentioned you refinced, so yes now that you detailed your transaction that you refinanced and paid off your old mortgage makes sense. Not sure though why would you refi your whole mortgage as a Heloc as rates are usually higher. Isn’t the Heloc interest only and what was the rate and how come you didn’t do a regular refi cash out?

Are you in a state that requires an attorney? I would have one anyway only because you don't have a realtor. On the lender side you can close in an LLC or you can put it in an LLC after closing, that's a question for your CPA if an LLC or an S Corp is more suites, it's all about minimizing your tax bracket on the rental income.

Do you need any advise in ragards to the financing?

You will have hard time finding a conventional lender who would take such small loan.

First of all, max loan to value allowed on a refi cash out is 80% LTV, what is the value of your home? $40K equity is not much when you want to do a cash out. Also, a 4.25% rate doesn't exist on the current market, I see the closing costs are very high so it seems the banker is charging you origination points, are you aware of it, and if so, how many years do you plan to hold on the property? How many years will it take you to recoup the origination points?

@Chris DeMello Hmm, am I missing something? How could you get a HELOC in the first position when you already have a loan in 1st position? HELOCS are subordinated to the 1st lien not the other way around

@Francisco Escobar so your current PITIA is $1500 and max rent you forecast is $1800 but you plan on getting a HELOC which is more likely interest only and your PITIA go up, no profit in the rent but from what you are saying the area is going up in value and ideally you would hold it a bit longer before selling, correct? The amount of equity is not relevant on your departure residence, the LTV is, what is the current value on your home?

Also, will you be able to qualify for the bigger mortgage on your new home? Keep in mind that on your departure residence you will have a slightly negative income as lenders use net rental income which is 75% of the $1800 and that is $1350 which will not cover your new total PITIA after you pull out the HELOC