All Forum Posts by: Jay Hurst

Quote from @Isaiah Wily:

Hello, 

After going through all the pre qualifications and being told I could offer an amount on a property, my Mortgage broker is now saying I need to show more income. I’m worried because we are a week out from closing and I might not be able to close. We are in a competitive market so winning the offer was a huge step. 

He's using DSCR for this loan and the appraisal just came in over asking price (which is bitter sweet because i can't refinance for 3 years using the this loan program). What are some options for me if for some reason he says I can't close with the bank statements I've provided to him? Private Lender? Hard money?

Thanks!

Isaiah

I guess I do not understand.  You are stating you are using a DCSR (debt service coverage ratio) for the loan which ONLY looks at the rental income of the property NOT your personal income, but then you say your LO says you need more income.  Is he saying the 1007 market rent schedule on the appraisal did not come on high enough to cover the total payment (including taxes/insurance/hoa)?  

Quote from @Anique Akhtar:

Quote from @Jay Hurst:

Quote from @Joe Cossio:

Hello, I was thinking about investing in a duplex in Arlington Texas, I heard if you live there on property, you have a lot of tax deductions. Is there a rule of thumb on the amount of cash on hand you need to make a purchase? or does it depend on the cost of property? 1st time posting 

You can buy with a FHA loan for as little as 3.5% down, or for a conventional loan you would have to put down at least 15% both assuming you do live in the property. It can be a great way to defray the cost of ownership. It was how I got into real estate investing 20+ years ago before it was called house hacking! ha.

Does an FHA loan provide you better APR than a conventional loan?

Depends on your credit score. FHA in general is a more expensive loan due to upfront and monthly mortgage insurance but it much more forgiving lower credit scores then a conventional. So, like a lot in lending the answer is it depends on all the factors of the individual.

Quote from @Joe Cossio:

Hello, I was thinking about investing in a duplex in Arlington Texas, I heard if you live there on property, you have a lot of tax deductions. Is there a rule of thumb on the amount of cash on hand you need to make a purchase? or does it depend on the cost of property? 1st time posting 

You can buy with a FHA loan for as little as 3.5% down, or for a conventional loan you would have to put down at least 15% both assuming you do live in the property. It can be a great way to defray the cost of ownership. It was how I got into real estate investing 20+ years ago before it was called house hacking! ha.

How many days does your mortgage show late on your credit report?  just a 30 or 60+?

If you are truly going to occupy this as your primary residence you would get two liens.  You would get the first lien at 80% or 607,200 (so under the 647,200) then get a 15% second lien for 113,850.  You pay a premium in rate for the second lien but it is not "hard" money either. You will just need a lender that has to the second lien sources that work in your area.  

If the property is in Florida you are going to have to pay a transfer tax for taking the property out of the LLC. just fyi. And it would much better to do that at closing then using a quit claim deed. As for what you are calling traditional financing do you mean a full Fannie/Freddie conventional loan?

Yes, you can use equity from a property that you own to fund the down payment. You will have to be able source the funds so you will have to qualify with the new likely higher payment (if doing a full doc loan anyway) on the property you are pulling the cash from.  There should not be a large effect on your credit. 

Depends. Depends on what your rate on your current first lien is as in can you do better then what you have or not.  Also, is this a long term rental are you going to be putting long term financing after buying with cash? or, is the cash out needed for the down payment?  

HELOC's are perfect for short term financing needs but not as good on long term because they are adjustable. Cash out are great for long term needs because they can be fixed rates and not as good as short term because they are closed ended and cannot be drawn up or down.
 

I am not licensed in NY state either but this should absolutely not be hard to find. Not much help I know it is out there for sure.  

In terms of interest rates there is actually a sweet spot right now with conventional rates on the rise and most of my DSCR investors have not yet moved up their rates. While a month ago with non-owner conventional rates in the low 3's DCSR loans were at least full point higher. But, with the large move in conventional rates and DSCR rates not yet moving it is almost a dead heat in rates. Same reason jumbo financing is actually quite a bit cheaper right now then conventional rates. Of course that rate distortion will not last for ever but not a bad time to take advantage.