All Forum Posts by: Elise Marquette

FHA guidelines state you need to have stable employment that is considered reasonably likely to continue in order to get approved. If you work remote or have an executed offer of employment for when you move, you should be fine.

There's pros and cons to both...

FHA - you can do a 3.5% down payment but you'll have mortgage insurance for the life of the loan. You'll also likely get lower interest rates than Conventional (however this may be offset by the mortgage insurance. Depending on credit and LTV, mortgage insurance for Conventional can be significantly cheaper than FHA. Just depends on her profile.)

Conventional - You'll need to put down 15%. Mortgage insurance will fall off quicker since you'll have more equity in the home and it should appreciate in value. By the time she goes to refinance, depending on the market, she may be able to drop the mortgage insurance off her payment. Conventional offers tend to get accepted quicker than FHA offers. Again, this depends on how competitive your market is.

USDA is a great program. Minimum credit is 620 for it. The trick is just finding that unicorn property that's USDA eligible. Not sure about your area, but it's often easier said than done. USDA is stricter on the debt to income ratio for qualification- The max DTI is a 41% whereas you may be able to go up to 55% for FHA for example.

But you get the good government loan program rates and of course, zero down.

Here's the link to the property eligibility map. 

https://eligibility.sc.egov.us...

@Jesse Krall well, I will caution you that many horse people could have reservations about boarding with you if you don’t have a whole lot of experience taking care of horses. Even if they come out twice daily for feeding etc., a lot can happen during the day or overnight. If a horse colics and you don’t recognize it, the horse could easily die.

Refinancing process - Purchase the property. In most cases you have to wait 6 months to refinance but there are loans out there with no seasoning requirement. Assuming that you used financing to purchase the property, you will basically be replacing the purchase loan on the property with a new loan. For example, if you purchased and then rates went down, you could refinance into a lower interest rate. If you have equity into the property you could possibly take cash out. Sometimes in low rate environments like this, you can both lower the rate (i.e. lower your monthly payment because less of the payment is going towards interest!)

In most cases, an appraisal is required. The BRRRR method is effective because the property increases in value from the time you purchase to when you go to refinance. If you hit a good deal, you should be able to get all or most of your money out of the property and be ready to roll it into the next property. When you close the refinance, the new loan pays off what you currently owe on the property and then you'll just make monthly payments in accordance with the terms of the new loan.

For your second question, lenders must lend based on the appraised value or the purchase price. Whichever is lower. One of the big issues in 2008 was lending more money than the property was worth so many people were upside down on their homes. Lenders do not lend on hypotheticals. It would be too easy for someone to say "Hey I'm buying a 100K property, doing 75K of renovation and it will be worth 250K." and then never do the renovations and pocket the cash. And then they have a property worth 100K and owe 175K on it. Then if they are dishonest enough to pocket the cash, how likely is it that they are actually going to make the mortgage payments? Probably not very likely. 

Banks lend on the lower of either the purchase price or the appraised value so this is a no go. 

Yup, Fannie/Freddie are tightening up those guidelines

Usually finding an online mortgage broker is a little like asking Web MD to diagnose you without specifying any symptoms. Wouldn't really recommend it for the most part, especially with an investor mindset and in a multi. Many times the online brokers are geared towards Joe and Jane homebuyer in single family home that don't have the same investor/wealth building mindset. 

Lenders will count the rental income, even if you have not had the property for two years. If you have filed taxes on the property, we look at the net rental income and then subtract out the PITI. If you have not filed taxes with the property yet, then lender use 75% of the lease.

Why not just speak with a lender to figure out if you'll qualify or not rather than trying to calculate your DTI on your own? You'll have to talk with a lender at some point so may as well eat the frog rather than spend all day trying to figure out your numbers when the lender is just going to do it anyway

Do you have experience taking care of horses? Or would you have the boarders do all their own care? Twice daily feedings, turnouts, blanketing, cleaning stalls, etc.