All Forum Posts by: Joseph Zanazan

The standard 6-month seasoning requirement on cash-out refinances has been eliminated. You can now refinance your home within 24 hours of its purchase. FNMA introduced the Delayed Financing Rule in 2011. the program was designed to help buyers who were buying non-lendable homes and had to close in a very short time frame. A home would be non-lendable due to its habitability. Homes with a hole in the roof , for example, are unlendable because no person should reasonably live there. The same is true for homes with broken windows, lead paint, missing smoke detectors etc.. With Delayed Financing, a buyer can purchase a home with cash, make the necessary home repairs, and then perform a cash-out refinance on the home's existing equity. This strategy is great because homes sold in auction for example require full payment, but by law banks in many states aren't allowed to technically approve a loan in fewer than 7 days. In these situations, the Delayed Financing program is a terrific fit. The home is bought with cash, and refinanced immediately. You can qualify for delayed financing as long as:

• The cash used for the original purchase is documented to the bank
• The new loan amount doesn't exceed the property's original purchase price
• A title search  shows no new existing liens on the home

Usually the institution that offers this type of financing option will seek fraud-prevention measures. You will probably have to provide your loan officer with the original HUD-1 document from the closing. This proves that it was actually sold and at what price. You probably will be able to finance at or below the 80% threshold to avoid mortgage insurance.

There are multiple websites online that will cultivate that type of public records and allow you to combine that data into a list format that you can use for your marketing purposes.

www.melissadata.com/

www.realquest.com

www.listsource.com

These are just a few of the most popular ones. Im sure there are more. Maybe the more seasoned marketing professionals can chime in.

If you didn't have a partner, i would suggest to definitely apply your commission directly to the deal by reducing the proceeds to the seller. The obvious advantage would be to avoid being taxed on earned income which you would otherwise be 1099'd for at the end of the year as an agent. Having a partner introduces a completely different set of circumstances like trust and experience in past deals which aren't necessarily stats you can measure on paper. 

Hello Thang

One key factor in determining which loan should get priority in principal reduction over the other is the overall value of the property. Your LTV ratio will primarily decide what your rate will be. The higher the threshold of your financed amount in respect to the property value, the higher the risk for the lender. The higher the risk, the higher your interest rate will be. One thing is for certain though, your rates are rather high compared to the market norm, that means you definitely will benefit from a refinance. I would suggest you refinance as soon as possible and lock your rate into a 4-something fixed and hopefully never touch the loan ever again. In this situation though since you're giving us some very general numbers, you cant really expect anything more than just general advice. The best way to go about this would be to talk about your goals both short term and long, and then decide what you really want to do.

The important thing to ask yourself is "what is my opportunity cost?","what is my true cost of money?", "is the market in a place where i can purchase at a good price and are the gains from my new investment worth the potentially higher rate or mortgage insurance i would be paying on a highly leveraged loan?"

There are many more details and factors we would need to know in order to truly give you the most sound advice and strategy. Usually in these situations we would take a full application and walk through your scenario together. One thing is for certain though, your rates seem to be on the higher side and they definitely could use a refinance.

FHA does allow the same 3.5% down payment on multifamily just like 1-unit FHA financing and gift funds are allowed towards down payment & closing costs as long as you intend on occupying the residence as your primary. Sellers can contribute towards true closing cost and not the down payment.

If you're coming in with capital support, you might as well try to come in with a larger down payment and potentially avoid the mortgage insurance premium. The upfront cost and the monthly premium might be better spent paying off your investor and building equity as opposed to wasting it on mortgage insurance. Highly leveraged FHA loans, as in anything 90% LTV and higher, make it mandatory for the borrower to pay a premium in perpetuity until the loan is paid off. Remember it will essentially cost you to refinance out of the FHA and into a Conventional, so incorporate that cost into your equation as well. Chalk it up as a cost of doing business because its something you will undoubtedly have to deal with.

The underwriter guidelines may seem initially absurd but due to the high statistic of foreclosures on investment properties, the lender wants to make sure that the seller isn't buying their way out of a contract that they no longer wish to carry. Costs that are normally the responsibility of the buyer to bear but are paid directly or indirectly by someone who has a financial interest in the property is considered an INTERESTED PARTY CONTRIBUTION. The most common IPC is from a seller that is willing to contribute a portion of their proceeds to help the buyer cover the necessary costs of the loan they're obtaining. IPCs are either financing concessions or sales concessions. Fannie Mae does not permit IPCs to be used to make the borrower's down payment, meet financial reserve requirements, or meet minimum borrower contribution requirements. Remember, assuming you're going through FNMA's DU pricing system, you will still need to show 2 months reserves minimum in addition to your down payment. IPCs that exceed the limits below are considered sales concessions. The sales price must be adjusted through a reduction to reflect the amount of contribution that exceeds the maximum, and the maximum LTV/CLTV ratios must be recalculated using the reduced sales price or appraised value.

*Primary Residence and 2nd homes 

>90% LTV/CLTV = 3% MAX IPC

75.01% - 90% = 6% MAX IPC

<75 = 9% MAX IPC

*Investment property

All CLTV ratios = 2% MAX IPC

These are absolutely conditions that you should expect for future financing instances. These are pretty simple purchase parameters. Things can get a little more interesting regarding the topic of IPCs during a refinance transaction. There additional ways to alter and select the most cost effective program that will accommodate your short term and long term goals as a consumer. Hope this helps.

GET MARRIED! lol

Ive helped transact over 300 short sale transactions as a negotiator for a major lender. If you have any specific questions or would like some pointers on how to approach a specific file, my door is always open.

FHA and VA backed loans absolutely do have certain physical requirements called MINIMUM PROPERTY STANDARDS. When applying for a refinance or a purchase, the property serves as collateral. If the borrower stops making the mortgage payments, the lender's remedy is obviously foreclosure. The lender will then sell the house to get back as much of the money it lent as possible. These minimum standards protect the lender. It means that the property should be easier to sell, and command a higher price if the lender has to foreclose. At the same time, a borrower is more likely to stay in a home that meets minimum standards, because he or she will not be burdened with expensive home repair bills from the start. Another thing to consider is that borrowers will try harder to make payments during financial hardship if the home is a pleasant habitat.

There are 3 main categories of standards that are considered requirements: 

*Safety - home should protect health and safety of occupants at all times. 

*Security - home should protect security of property (security not as in weather or burglars but as in collateral) 

*Soundness - home shouldn't have any physical deficiencies that compromise structural integrity.A

An appraiser usually comes out to the property, conducts their inspections and documents all observations and expert opinion. This formal appraisal is what the bank will utilize to make their determination about the condition of the property. FHA will only make mandatory the changes that compromise Safety, Security or Soundness. Most deferred maintenance and cosmetic stuff usually won't impede the process.

Some of the conditions for example would be:

Missing smoke detectors

Unstrapped water heaters vulnerable to earthquake

Missing handrails where they need to be

Cracked or damaged exit doors that are being utilized

Cracked window glass or floors

Plumbing leaks

Asbestos 

Rotten countertops

Trip hazards

Defective surface paint

Just to name some of the few, I'm certain there are many more. These will give you an idea about some of the basic requirements. Might seem absurd, but all they're doing is protecting the best interest and the overall integrity of the situation. 

I unfortunately can't see what state you're from or else i would provide you with the state appropriate literature regarding COMMUNITY PROPERTY and COMMON LAW states. 

Most states, except those listed as community property states, use the COMMON LAW system of property ownership. In these states, it's normally easy to tell which spouse owns what. If only your name is on the deed or title, then it's only yours. You are free to deed  your property to whomever you choose, subject to your spouse's right to claim a certain share after your passing. Property acquired by a spouse during marriage is the property of that person separately, unless the person agrees with his or her spouse to hold the property jointly. The subsequent earnings and capital gains will be treated with the same principals.

In COMMUNITY PROPERTY states, earnings by either spouse during marriage and all property bought with those earnings are considered community property. This means income and assets are owned equally by husband and wife. Likewise, debts incurred during marriage are generally debts of the couple. Married people can still own separate property. For instance, property inherited by one spouse belongs to that spouse alone. A spouse can leave separate property to anyone; it doesn't have to go to the surviving spouse. If you live in a community property state, you're required to report half of the community income earned by your spouse on your return. If the IRS determines that the community income earned by your spouse was greater than you thought it was, you can be liable for tax on your share of that income even though you filed a separate return. The community property states are as follows:

• Arizona
• California
• Idaho
• Louisiana
• Nevada
• New Mexico
• Texas
• Washington
• Wisconsin

Do some additional research now that you know what to look for. Consulting your CPA is advice that will never fail you, but don't be afraid to do your homework and educate yourself.