All Forum Posts by: Jason Wray

Juan,

Yes when applying for a loan or line of credit banks use your credit score.  Most banks require a Tri-merge report all three bureaus Equifax, Experian & Transunion in order to establish a Mid score or middle of the 3 scores.  Some banks use just one particular score and sometimes refer to it as a "Soft pull".

But regardless of the above it will show up on your credit report as a liability and effect your total DTI debt to income ratio going forward.

There are also situations to consider that some banks will look at what the "Max payment would be if the line of credit would be fullly drawn" in order to gauge LTV on collateral and future debt to income ratios.

Blake,

You are talking about 100% financing which only applies to Primary homes. Even though the house is worth $100K and you are getting it for $80K you need a loan for the "purchase price" banks only use that LTV scenario in a "refinance" situation because you own the house and they would be offering a loan based on the total equity. When you buy banks want you to put skin in the game and take on some of the risk with a down payment.

Brady,

Have you though about just going the traditonal route and using a first time home buyer program100% financing with a DPA or FHA with 3.5% down to acquire the first proprerty. You can transition the the property into a rental in 6 months once you have "six (6) months title seasoning" where you could reifnance the FHA into conventional while taking out cash.

Nothing wrong with creative financing but your looking at a lot of work and a lot of digging to find the perfect person where those scenarios will work for the seller.  

That rate is very high for a second home, have you looked at a COR instead?

 Try looking in Murfreesboro

Angela,

It's actually on realtor and zillow it popped up in a search for knoxville off of ridgedale  (4816 ridgedale)  I have no affilaition with this property I just googled it for reference so I hope this helps!

I wish homes here in Florida were similiar!  Would love to own a home like that 4/bd/2bth on a good chunk of a lot for $225K!  Especially since your taxes up there and HOI are so cheap.

That house in Tampa or St.Pete would go for $450-$750K and taxes would be around $5800-$6500 a year plus $3500 for HOI - INS>

Justin,

You do not need to worry about any W2 or persoanl income/tax returns going forward as long as you choose the DSCR loan program for both purchase and COR cash out refinance. These loans allow you to even put less down on 2-4 Units Multi-family rentals versus conventional.

Another highlight is you can close in an LLC or Trust...

Tom,

Fannie Mae & Fredie Mac will only buy and guarantee loans that are issued to a "person" not an "Entity or business". So your not going to have much luck with the lender taking you off the deed they have to have a "personal guarantee". But you can use programs and loans like DSCR and Non/Qm which allow you to close on an "LLC or Trust".

When you sign the RESPA documents of any Conventioanl loan it states on "All" loans Deed "Cannot" be held in a Entity such as an LLC, Trust and cannot be "Assumed" unless its a VA Loan for "Assumption clause" only.

You may not need to refinance but if you need to pull out any cash right now just use a DSCR loan and close in your LLC or Trust.

 @Sohel Mahmood

The only problem that I see a lot is investors buy the investment property first and forget that you cannot use the rental income until you have filed taxes for that year and have the full 12 months. So lets say you have limited or lower income and cannot support (2) mortgages you would have to wait a full year and file taxes to use your Schedule E income in order to offset or have extra income to support a investment firt and a new primary mortgage payment. I have seen a lot of people stuck because they buy a rental and then beofre a full year is up want to buy a primary and their DTI debt to income ratios are too high and annto be approved.

The opposite actually works in your favor so if you purchased a primary first but wanted to buy another property as a rental there are DSCR programs that do not use perosnal income just the proposed rents per month. But if you make good money and have sufficent liquid reserves you will be fine either way. I only offer these scenarios to help avoid issues as a preventive maintenance type of foreshadowing.

Yes, you can do a DSCR loan or a bank statement loan where job seasoning is irrelevant.