All Forum Posts by: Jason Wray

Toni,

I can give you several reasons why a HELOC is not the best choice for the down payment of an investment property. Before I get into detail have you given any thought to just doing a cash out refinance. Having cash in hand is not only a great tool for an aggressive offer but it also acts as a back up for PITI reserves, something a HELOC cannot offer. In most cases people choose the HELOC due to an extremely low rate on the first mortgage. But rates are so low right now its almost a go to option for a down payment on another home.

Yes, One payment and same renovation options as 203K.

Seth,

Sounds like a good plan just make sure you have your REI business proxy put in place. You also want to make sure you are using your certificate of Eligibility for a VA loan offering you 100% financing. It might be hard but also consider asking for seller contribution which covers the closing costs usually between 2-4% is standard. That helps cover all or some of the closing costs making your out of pocket limited to the appraisal cost and inspections.

If you do find yourself having to move less than 12 months just remember to refinance the VA loan into a conventional loan before moving out. This will free up your VA entitlement for the next purchase using the 100% no money down once again for a new home. You would have a couple of options when you go to refinance from VA to conventional, Rate and term or cash out refinance jut do not move out prior to refinancing so that it is a primary home refinance and not an investment refinance which carry a higher rate.

Aleph,

There are programs where you do not need a Exp.Investor - or someone with flip/rehab seasoning.  Do you plan on flipping within 3-6 months?

Your going to to want to use a Fannie Mae/Freddie Mac renovations loan. FHA is going to hurt you in the ROI aspect due to the UFMIP 1.75% and the MIP .85%. Versus the Conv PMI and rates with no UFMIP.

If you have good to fair credit your best using a conv. program to avoid the UFMIP & higher MIP versus PMI. You can also use seller Contribution to buy out the PMI lender paid going Conv.

Mickey,

Sounds like your in a good position you could take out up to 80% LTV if needed. Mortgage rates are great right now and property values are on the rise in most cases. [Solicitation Removed by Moderators]

Dustin,

Do you have enough equity in one of your properties or more to pull out some cash?  Cash out refinance to take out enough cash and possibly lower your current rate(s).

Erin,

They are back with some of us banks but they were closed due to COVID. You still have FHA 203K, Freddie Rehab and stand alone seconds for 80/20 90/10 loans.

Shahzad,

Depends on the lender/program Freddie has more than one optionss but it can be used if its a true rental and your not occupying any units they will only use 75% of the rental income. You also have teh DSCR loan program that lets you use full income with 20% down for all property types SFR and (3-4 Units).

Christopher,

Have you had a chance to take the home buyers class yet? Just wanted to remind you of how long you have to live in the home before you can sell it or refinance or take out a HELOC without having to pay off the DPA funds.... Not a great option is if your looking to sell or refi to buy more homes! 3 years is a long time....