All Forum Posts by: Eric Veronica

5 year balloon can be pretty risky.  Biggest concern is what happens if we enter a recession in 5 years and your current lender is unwilling to extend or refinance.  Or if your property value drops and you are unable to find a lender to replace the debt.  I would probably keep searching if i was in your shoes. 

@Kevin Urban  Some lenders have limits on how high they can increase a rate to get it get par pricing (zero points).  If you have good credit I think you should be able to find a lender that can price your loan without charging points.  

Now if you have an average credit score and you are trying to cash out a multi unit investment property that might be a scenario where you have to pay points.  

Money transferred from an account is someone else's name is not an acceptable source of down payment funds on an investment property.  Insane or not... its the rule.  

Both a HELOC draw or a 401k loan are acceptable sources of a down payment on an investment property. An unsecured loan like a credit card cash withdrawl or a loan from a family member are not acceptable source

As @Chris Mason stated the closing costs should be the same.  Interest rates should also be the same.  

A conventional cash out refinance requires you to be in title for 6 months.  The delayed financing exception allows you to apply for a cash out refinance with less than 6 months seasoning.  No difference in rates/fees.

no fix and flip.  I am a conventional lender :-)

Hi Tina, 

Have any of the lenders brought up the Homestyle renovation loan?  This is a conventional  program that will lend up to 95% of the post renovation value.  

If you are applying for a conventional mortgage the guideline states "A minimum history of 2 years of commission income is recommended; however, commission income that has been received for 12 to 24 months may be considered as acceptable income, as long as there are positive factors to reasonably offset the shorter income history"

So less than 2 years is possible.  The term "positive factors" is very gray so youll want to make sure that the loan officer you are working with gets this signed off on before giving the preapproval. This could make the preapproval process take a bit longer but it it is worth the wait.  

@John S. It IS possible that a property could go undetected however there are a two specific things that come to mind which would blow your cover

1. If you are providing tax returns and the property shows up on Schedule E then the lender will see that you own the home.  If the Schedule E shows that you are deducting mortgage interest (line 12) then the underwriter should inquire about that debt.

2. Most lenders pull a report commonly called a "drive report" or a "fraud report".  This report pulls public records from all over the country.  Among other things, this report tells the lender about any properties that a borrower might have ownership interest

Exciting news for anyone following this thread.  This week Freddie Mac announced that the Homepossible minimum down payment requirement is decreasing from 15% down to 5%. 

FHA loans do have value and there are always exceptions, but In most cases FHA is a less desirable financing option than conventional.

Also you stated that you are looking to acquire an investment property. FHA is not an option for investment properties.