All Forum Posts by: James Zettelmeyer

Not trying to hijack the thread, but to answer your question Brian:

On loans $50k or higher:

30yr Fixed - 7.125%

15yr Fixed - 6.75%

5/5 ARM - 6.5%

3/3 ARM - 6.25%

- Purchase: 80% LTV

- R/T refi: 75% LTV

- Cash-out refi: 65% LTV

*Note - our ARM/s are based on a 5 year or 3 year treasury note, hence 5/5 and 3/3, so they tend to be more stable than the standard 1 year treasury note. All 30yr amortized, no balloons.

On loans below $50k

30yr Fixed Only - 8.5% (for loans between $40K-$49,999)

30yr Fixed Only - 8.875% (for loans between $25k-$39,999)

- Purchase: 75% LTV

- R/T refi: 70% LTV

- Cash-out refi: 65% LTV

The 75% of gross rental income is correct.  The guidelines allow for this based on either current lease agreements, or, for vacant units, you can request as part of your appraisal a 1007 rent comparison schedule where the appraiser, in addition to determining the value of the property, will complete a 1007 form which basically determines what the vacant unit(s) would rent for based on market comparables.  So if the 1007 says that a particular unit should rent for $1000/month, then you can count 75% of that, even if the unit is vacant.  Key is to find a lender to go with follow the guidelines without overlays.  Generally speaking, your best bet is to search for wholesale lenders (i.e. brokers) as opposed to banks as wholesale lenders exist purely to lend money and nothing else, so as long as it meets the minimum guidelines and its insurable and sellable, then that's all they care about.  Banks tend to be a bit more conservative because they can afford to be since they have other sources of income other than mortgage lending.  This isn't always the case obviously, but generally speaking, a wholesale lender might be your best bet for this situation.  Obviously referrals for a good one are highly valuable. 

 One thing to note is that any income being counted from rent is NOT netted against the proposed mortgage payment.  It is added to your total overall income.  So if you make $3000/month gross and the property rents for $1000/month, they will add $750 to your gross income for a total of $3750.  This will be the total gross income they use to determine your debt ratio against the full proposed mortgage payment and your other current monthly obligated debts.  May not seem like there's a difference, but there is as adding the rent to your income gives you a higher debt ratio (i.e. more conservative) than netting it off the proposed mortgage payment.  Doesn't really matter if you are well qualified, but if you are right up against the limits and you or your loan officer is doing it the wrong way, then it can cause a problem where you are thinking you qualify and you actually don't.  Just keep that in mind. 

What state are you in?  We are a direct lender with our own in house portfolio products with a minimum loan amount of $25k.  We can do 20% down on 1-4 family investment properties on a 30 yr fixed rate loan, down to $50k.  Loans between $25k-$49,999 we do 25% down on 1-4 fam investment properties on a 30 yr fixed rate.  No balloons.  If you have any questions, let me know!

Fannie Mae/Freddie Mac guidelines allow for 20% down on single family investment property purchases. 25% down if its a 2-4 unit investment property. So if you are buying a single fam property, getting 20% shouldnt be an issue. However if its 2-4 fam then you have no choice but to put 25%, at least if you are dead set on going Fannie/Freddie. If you go portfolio, there are plenty of options that will only require 20% down on 2-4 unit properties, albeit at the cost of a higher rate. Whether its rented or not makes no difference in the LTV, its only needed if you cant qualify with carrying the full mortgage payment on your own. As for the FNMA Homestyle Renovation loan, you can use it for an investment property, but I believe they only allow single family investment properties, anything that's 2-4 has to be primary residence. Below are the guidelines from that program, it only shows one LTV for a rental and that's for a single family residence. In that case you can go as high as 85%, but keep in mind this is a rehab loan, so you would have to be doing renovations as part of the loan to get that.

The following are maximum LTV/CLTV/HCLTV ratios for purchase or LCOR when HomeStyle Renovation mortgages are underwritten with DU* (note that borrowers can also qualify for up to 105% CLTV with eligible Community Seconds®):
- One-unit principal residence to 97% LTV/CLTV/HCLTV with FRM; 95% with ARM (Available in DU on March 17) (Note: For LTVs > 95%, on purchase transactions, the borrower must be a first-time home buyer unless combined with HomeReady; for LCOR transactions, the loan must be owned or securitized by Fannie Mae.)
- Two-unit principal residence to 85% LTV/CLTV/HCLTV with FRM/ARM
- Three- and four-unit principal residence to 75% LTV/CLTV/HCLTV with FRM/ARM
- One-unit second homes to 90% LTV/CLTV/HCLTV with FRM/ARM
 MH LTV/CLTV/HCLTV ratios principal residence to 95% FRM/ARM; second homes to 90% FRM/ARM (Note: 105% CLTV is not permitted with Community Seconds)
    - One-unit investment properties:
 Purchase up to 85% LTV/CLTV/HCLTV with FRM/ARM
 LCOR up to 75% LTV/CLTV/HCLTV with FRM/ARM

Riverview Mortgage Corp. is a family owned business providing not only your standard conventional mortgage products, but also our own in-house portfolio products for real estate investors looking for a better option than some of the other well known lenders. We understand how frustrating and expensive the portfolio lending market can be as we were also once subjected to the options that were available, which is to say were not great at best. That is why we decided to develop our own in-house products to provide high quality service and affordable financing, as well as LTV's and minimum loan amounts that are much more practical to the everyday investor. We provide a common sense approach to underwriting and will not give our clients the run around that is so common in this industry. If you are looking for one of the easiest and most affordable portfolio lending options around, then you have come to the right place! Check out our products below, visit our website or contact us directly for more information. At Riverview Mortgage Corp, our family is here to help yours!

• PORTFOLIO PRODUCTS

  30yr & 15yr Fixed Rate, 3/3 ARM, 5/5 ARM

• Rates as low as 6.25%
• Up to 80% LTV on Purchases
• Up to 65% LTV on Cash Out Refi's
• Up to 75% LTV on Rate/Term Refi's
• $25k minimum loan amounts!!
WE ARE NOW SERVING PENNSYLVANIA AND OHIO. BUT OTHER STATES SOON TO FOLLOW IN 2018.

NMLS: 1642779

James Zettelmeyer, Lender

216-288-2902 (cell)

Riverview Mortgage Corp. is a family owned business providing not only your standard conventional mortgage products, but also our own in-house portfolio products for real estate investors looking for a better option than some of the other well known lenders. We understand how frustrating and expensive the portfolio lending market can be as we were also once subjected to the options that were available, which is to say were not great at best. That is why we decided to develop our own in-house products to provide high quality service and affordable financing, as well as LTV's and minimum loan amounts that are much more practical to the everyday investor. We provide a common sense approach to underwriting and will not give our clients the run around that is so common in this industry. If you are looking for one of the easiest and most affordable portfolio lending options around, then you have come to the right place! Check out our products below, visit our website or contact us directly for more information. At Riverview Mortgage Corp, our family is here to help yours!

• PORTFOLIO PRODUCTS

  30yr & 15yr Fixed Rate, 3/3 ARM, 5/5 ARM

• Rates as low as 6.25%
• Up to 80% LTV on Purchases
• Up to 65% LTV on Cash Out Refi's
• Up to 75% LTV on Rate/Term Refi's
• $25k minimum loan amounts!!
WE ARE NOW SERVING PENNSYLVANIA AND OHIO. BUT OTHER STATES SOON TO FOLLOW IN 2018.

NMLS: 1642779

James Zettelmeyer, Lender

216-288-2902 (cell)

Riverview Mortgage Corp. is a family owned business providing not only your standard conventional mortgage products, but also our own in-house portfolio products for real estate investors looking for a better option than some of the other well known lenders. We understand how frustrating and expensive the portfolio lending market can be as we were also once subjected to the options that were available, which is to say were not great at best. That is why we decided to develop our own in-house products to provide high quality service and affordable financing, as well as

LTV's and minimum loan amounts that are much more practical to the everyday investor. We provide a common sense approach to underwriting and will not give our clients the run around that is so common in this industry. If you are looking for one of the easiest and most affordable portfolio lending options around, then you have come to the right place! Check out our products below, visit our website or contact us directly for more information. At Riverview Mortgage Corp, our family is here to help yours!

• PORTFOLIO PRODUCTS

  30yr & 15yr Fixed Rate, 3/3 ARM, 5/5 ARM

• Rates as low as 6.25%
• Up to 80% LTV on Purchases
• Up to 65% LTV on Cash Out Refi's
• Up to 75% LTV on Rate/Term Refi's
• $25k minimum loan amounts!!
WE ARE NOW SERVING PENNSYLVANIA AND OHIO. BUT OTHER STATES SOON TO FOLLOW IN 2018.

NMLS: 1642779

James Zettelmeyer, Lender

216-288-2902

If you bought the properties in 2017 and haven't prepared your 2017 tax returns yet, or if you have bought any properties this year which wont show until you prepare your 2018 tax returns, they will count 75% of the gross rent against your PITI. If its a positive, they will count it as part of your income. If its a negative, they will count it as part of your debts. If you have properties currently listed on your schedule E for your most recent two years tax returns, then they will take the net profit or loss and add back in Depreciation, Taxes, Insurance and Mortgage interest for each individual property listed. They then average each total over 12 or 24 months (depending on if that property is on your most recent two years tax returns, or just the last one) and subtract the current PITI from that. If the final number for each property is a positive, then they add it as income. If its a negative, they count it as a debt. If you counted a major repair expense, you CAN count it, just depends if it was a one time thing, or if it was necessary to get the house rentable, etc.

In most cases, if a client has a mortgage, even after adding back in those deductions, averaging and then subtracting the current PITI, it still comes out to some sort of small loss. As a result, the more properties you acquire, generally the harder it gets to continue to qualify for more from a DTI standpoint, plus you need reserves for each property that is financed. That is where portfolio lending starts to become more attractive as there are numerous options that don't take into account what your tax returns show and may not require as much in reserves, albeit at the cost of a higher rate and a little more out of pocket.

FHA/USDA/VA guidelines and conventional guidelines will only require 12 month rent verification under specific scenarios, almost all of which are determined when your file gets run through Desktop Underwriter, which is the program that underwrites your file before the human underwriter touches it. The human underwriter then proceeds based on the findings from Desktop Underwriter. If DU gives you a full approval, then you almost never need rent verfication (unless the underwriter is really being stingy about something). If DU gives a REFER, that means you still meet min guidelines, but it wants the human underwriter to make the final decision. If you received a REFER from DU, then you will need 12 months rent verification. For government loans such as FHA/USDA/VA, the general line for that occurs with credit below 640, or if there is some other issue that Desktop Underwriter doesn't like such as lack of credit history, etc. However, if you have good credit (and sufficient credit history) and income and all that and DU is fully approving you, then rent verification should not be required.

Banks can sometimes have lots of credit overlays, which are basically rules on top of rules. If FHA says you can go a mile, the bank may say "we only let you go half a mile" as a simple example. So if your good enough to get a full approval through DU, the bank may still ask for rent verification. So, def shop around a bit more. If you still get flack, try some local mortgage brokers. The good ones will partner with lenders that have little to no overlays, so if your a full approval with DU, then no rent verification is needed and they wont ask for it.