All Forum Posts by: Jamie Jones

I've used Fourth Capital, which is a local Nashville bank, for mine, although they are now in a merger and may have cut back some on that type of lending. 

https://fourthcapital.com/

 Great plan Doug! 

Welcome to BP, @Devon Watkins! Your legal background should be a huge asset to you as you get started in your REI journey. The southeast is definitely a great spot to invest. Since you are from Alabama, I would seriously look in those markets first (especially Huntsville). Typically finding your "core four" is the toughest part of investing out of state, but if you can leverage your existing network you have there, you could potentially by-pass a lot of headache and struggle.

Also, just as an FYI since you mentioned you work in entertainment - I work with our Music & Entertainment team at my bank in Nashville. This wouldn't apply to investment properties but we have a special loan program for primary and second homes for professionals in these industries. We can lend on this product anywhere in the U.S. Just something to think about if you're ever looking into buying a primary residence or a second home somewhere. 

Got it. For reference, for a conventional 30 year, I am currently pricing that loan at 7.875% with 2 points ($1,870). That rate could vary some though depending on property location. Hope that helps! 

He could buy a new primary with 5% down (assuming DTI isn't an issue). Why do you think he would need a significant down payment?

 Why would he want to do that, unless he needs to pull additional cash out? I'm assuming his existing loans likely have way better rates than what he could get in today's market. 

I'm in Tennessee so can't speak on the specifics on some of the standard closing costs in New Jersey, but nothing looks too out of the ordinary. Please keep in mind that your reserves (for insurance & property taxes) is used to establish and fund your new escrow account. Though this is bundled with other closing costs, it's not a true closing cost and will be the same regardless of which lender you choose. With an LTV at 75%, you should be able to waive escrows if you'd like, but will be paying an additional .25 in points to do so. The title costs come from the title company, so once again going to typically be roughly the same regardless of which lender you choose.

In regards to the rate/pricing of the loan - unfortunately, in the market we are in, it is very tough to price any investment property loans at we in the mortgage business call "par". What this means is that most conventional loans on investment properties require us to charge points just to lock a rate in, and there may not always be an option to just charge a higher rate to avoid the borrower paying points. This is due to the MBS market, and how MBS are packaged and sold into different "MBS coupons" in the secondary market. 

Just for your reference, I priced your loan out and am at an 8% rate with $1,641 in points, or another option would be 7.625% paying 1 point ($1,875). The subject property being a duplex also adds in .375 in additional discount points on conventional loans at your LTV.

Hope this helps! 

 what is your down payment on this deal?

Hi @James Dale, it's definitely possible to get a conventional loan on an investment property and I do them all the time. In this current market, the rate is going to be pretty brutal unless you have 25% down. The key difference between this and a DSCR is that the underwriters are looking at your financials (FICO, DTI, etc.) more so than than the property financials. That being said, we can use 75% of the projected gross rental income to help offset the new PITI payment when underwriting the loan.

Hi @Doug Quist, you have received a variety of answers to a very simple question. This is straight from Fannie Mae's guidelines. Going to be a little different if you end up in a jumbo loan program, as every investor will have their own criteria. I typically originate jumbo loans through Citi Bank, which allows for a max of 5 financed properties for an owner occupied transaction. I believe Chase is a little more lenient, but not positive.