All Forum Posts by: Chris Duvall

@Jessey Kwong "You can have everything in life you want, if you will just help other people get what they want." - Zig Zigler

Helping other people is not just the right thing to do. It also helps US understand the issues we talk about better. Some of the most successful people I know spend the majority of their day trying to help others. They don't ask for anything in return.

They do it because it's the right thing to do, but the result is long lasting trust and good will. A place at the table in the inner circle. A shot at wealth. A huge book of friends. Feeling like contributing members of society. That, along with a bunch more.  

 Regardless, If he doesn't know whether it was filed as an investment property.. it probably wasn't and you are likely right in the end.

I don't know enough to really comment on most of that. Why are you using a local lender over a loan officer? How many lender's have you talked with? It sounds like you've just talked with one which doesn't really give you a clear picture of the issues. Has the lender said these things will build trust? I wouldn't pay for a HELOC just on the off chance it might impress a lender.

Accumulating capital is always a good thing. Showing the ability to accumulate capital is considered a mitigating factor in judging whether someone is credit worthy for a traditional loan (fha, fnma, fhlmc, and va) but I don't know how other lending works.

I mean, what did the guy you want money from say you have to do to get money? 

If I were you, I'd get all my ducks in a row. I'd DEFINITELY know how I filed taxed on my properties. I'd know my cash on hand, and my debt to income ratio, and what kinds of debts made up each section. 

I'd know how much equity I had in my home, roughly the appraisal value of the home, and how long I'd had renters for. I'd also be able to document the renters (rental contracts, xyz). 

Then I'd find a friend who knows a lender, I'd call the lender and tell them I wanted to buy them lunch and pick their brain on some investing questions. 

 He moved in with a friend, not vice versa.

Not 100% on the answer, but their reply doesn't sound like the best option. It'd be good for more experienced members to correct me if any parts of this are wrong.

He's a portfolio lender so I guess he doesn't have access to standard loans like a loan officer would. If you go to a loan officer, I think you can qualify for a new primary residency with most standard loans (fha, fnma, fhlmc, and va). This is with the caveat that you listed the residency as a investment property on your taxes last year.

If you haven't lived in a property you own for 1-2 years (and it helps if you filed taxes stating that what was once your primary residence turned into an investment property), you will have the option to get a new loan as primary residence. 

Otherwise they might force you to qualify your new loan as an investment property, which wont offer as good of rates, the cash to close is typically higher, and it's harder to qualify. A VA loan might do 100% (or more) financing, FMA something like 3.5% down, and then probably 5%+ for FNMA and FHLMC. (I'd double check this, but a loan officer will tell you it all for free).

One option would be to cash-out refinance the investment property and use the funds as a down payment on the new property. 

If you can avoid getting a PMI on your new loan It would be a great option (usually that's by putting 20% down, but there might be other ways).

One down side of the property you own being an investment property is that the mortgage companies will give you a worse LTV (Loan To Value). A primary residence will allow you to take a lot more money out in a refinance than an investment property. For an example, a primary residence may only require you to own 10% of a home while an investment property requires you to always own at least 20% after a refinance (those aren't accurate numbers, just used as an example). But again, taking out a loan to purchase a primary residence is way preferable to trying to take one on an investment property.

If you're going to a lender instead of a loan officer because of your debt to income ratio, sorry! I don't have a solution to that. 

Listing the home as an investment property allows you to consider rental income as part of your DTI (debt to income) while traditional lenders don't accept house hacking (but small lenders and community banks often will).

@Christopher Phillips That is exactly what I meant.

Thank you!

Thanks Jon, are you saying a lender's appraiser isn't even going to come out and look at the house before assessing it? 

If they do come out to look at the home, I'm wondering what metrics they use to determine the value, and if I can do anything to bump the value of the home up so I can get a higher assessment and better refinancing.

I want to refinance my home within the next 1-2 years. How do I maximize what my home is assessed at?

It's a 2 year old cookie cutter in a new neighborhood in Nashville, TN. I have two renters and am living in the 3rd bedroom. I'm likely going to move back in with my parents (who are closer to a new job I'm taking/so I can write off 100% of the home as a rental). 

How does an assessor determine the value of my property? Is it determined by nearby sales within 6 months? There are new houses being sold down the street for 30k more than mine, will they get factored in the assessment instead of my neighbors?

Can I get a better assessment by installing wooden floors upstairs, putting up a fence, "improving" the kitchen, or having a perfect lawn?

Does the home being a rental influence refinancing?

Also, will turning the home into a full rental property influence my goal to get a second mortgage, or will they only factor in my debt to income?

I'm meeting with a accountant next week for rental issues regarding taxes, but a lot of the lending is out of his scope. Thank you all for any assistance!