All Forum Posts by: Account Closed
Account Closed has started 75 posts and replied 5714 times.
Post: BRRRR Strategy - I don't get it.. what am I missing?
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- Central Valley, CA
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Originally posted by @Matt Powell:
Crystal clear, actually. Thanks very much. Appreciate your commitment to giving good answers.
So it sounds like liens need to be on the property to be factored into the official equity equation. Didn't know that.
Lots of good examples of refis in this thread. But maybe the definition of equity would be helpful? In very simple terms, equity is the value of the property minus the debt. If you buy a $80K property with cash and you use your own cash for a $20K rehab, you have 100% equity. Doesn't matter if the property is worth $75K or $100K or $125K when you are done. The equity position is the same...100%. Of course, if the property declines in value, that's a loss. But you still have 100% equity.
There's a lot of focus here on the 20% equity "required" for a refi. 20% equity is an industry norm but equity requirements are specific to a loan product/lender. There is no hard and fast rule about refis. Some lenders will let you get more out, some less.
Post: First loan app but no funds
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- Central Valley, CA
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Originally posted by @Darrell Shepherd:
Its been years since I've done conventional financing, but you said they'd accept a gift from a family member, but not a friend. Does this mean you have a friend willing to spot you the $6k?
If so, is there any reason that friend couldn't give it to the family member who then gives it to you? I cant imagine them sourcing or requiring the family member gift. When I bought my first house (almost 20 years ago), all we did was a letter from my father in law saying we didn't have to pay the money back.
That was my first thought too. The gift DP requirement that it be from a family member seems so vague and and not provable. Must be a government operation. :)
Post: First loan app but no funds
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- Central Valley, CA
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Originally posted by @Mark Ferguson:
Originally posted by @Account Closed:
Originally posted by @Mark Ferguson:
Conventional loans have down payments as low as FHA now with lower mortgage insurance. Have you looked into conventional owner occupied?
Curious, what conventional product has a 3% down?
http://themortgagereports.com/12603/conventional-97-mortgage-loan-guidelines-plus-mortgage-rates
Thanks Mark! Good stuff on Conventional 97, which I had never heard of. Probably because the minimum credit score is 740 when using gift downpayment funds....not something I see a lot. However the 680 required for borrowers with their own down is doable.
Post: First loan app but no funds
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- Central Valley, CA
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Post: First loan app but no funds
- Investor
- Central Valley, CA
- Posts 6,037
- Votes 3,729
Post: First loan app but no funds
- Investor
- Central Valley, CA
- Posts 6,037
- Votes 3,729
Originally posted by @Mark Ferguson:
Conventional loans have down payments as low as FHA now with lower mortgage insurance. Have you looked into conventional owner occupied?
Curious, what conventional product has a 3% down?
Post: First loan app but no funds
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- Central Valley, CA
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Originally posted by @Charlie Fitzgerald:
A federally-backed home loan is intended for use by a borrower who occupies the house as a primary residence. FHA and VA prohibit investors from using the loans to acquire income properties. A veteran, or qualified family member such as the unmarried widow of a deceased veteran, can obtain one loan type initially, and the other loan type on a different property, in the future, without having to pay off the prior loan. In such a case, the veteran would have both loans at the same time.
A principal residence is defined as a home in which the borrower intends to reside for a majority of the calendar year. A veteran cannot obtain a VA and FHA loan at the same time with the intention to live in both as an owner-occupant. Lenders typically include an affidavit or certification in their loan documents that the borrower must sign, verifying that the home will be owner-occupied. A veteran who intentionally deceives the lender and federal government by obtaining the loans under false pretenses risks having to repay the loans immediately, foreclosure by the lender and possibly federal criminal charges.
So, while it is not impossible to get an FHA loan on a home you declare as a primary residence, and then at some point in the future, buy another home that you declare as a primary residence using your VA benefits, unless there are justifiable mitigating circumstances for doing so, you are in fact committing loan fraud and are liable for these actions.
Thanks for clarifying and for including the info about the VA OO affidavit. I find that many people sign such affidavits without thinking much about them. To be fair, loan and escrow docs are endless and it's easy just to sign what is put in front of you. I have friends who have signed OO statements in order to get good loan rates. We have people here on BP who openly admit to applying for FHA loans without intention to occupy. I have had more than one seller want me to buy their properties via short sale, and rent back or resell to them. When I point out the affidavit that will be part of the sale, the one that says there is no rent back or side deal (you know, cause the lender is agreeing to take a hit), they say they have no problem. I do though. Not because I'm a goody two shoes. But because loan fraud is a federal offense. Not worth the risk IMO
Post: tenant asking for discounted rent due 2 oven not working properly
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- Central Valley, CA
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Originally posted by @Colleen F.:
Normally I would say no discount if it is there within a couple of days but since you are asking them to go without an oven on Christmas they may have had baking planned. Drop off a gift card and an oven thermometer. Other then that I would not do it but it seems the time of year and this particular inconvenience I would call it a gesture of understanding for the inconvenience not a rent discount.
That's exactly would I would do and what I would appreciate as a tenant. I had my oven stop working the day before Thanksgiving a few years ago, and I make the dinner for 10-12 people every year. It was my stove so no one to call but the repair man (who owed me a favor, so he fit me in and he had the replacement part on his truck). The tenants in this case have a working oven, at least manually. A gift card and an oven thermometer is a huge show of goodwill.
Post: What happens when drug addict rents cottage in nice neighborhood
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- Central Valley, CA
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Originally posted by @Crystal H.:
@K. Marie P. did you read the article? The landlord called the police and they never did anything about the drug use. Her only option was to evict them
To clarify: even if your tenant is arrested for drugs and/or goes to jail, you still have to evict them. There's no special process for criminals, the missing or the deceased. The best you can hope for is a tenant that will voluntarily agree to terminate and remove their possessions.
Post: What happens when drug addict rents cottage in nice neighborhood
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- Central Valley, CA
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Originally posted by @Crystal H.:
@K. Marie P. did you read the article? The landlord called the police and they never did anything about the drug use. Her only option was to evict them which I think would be the better option then having them arrested. Let's assume they get arrested and stay in jail then you still have to go through the eviction process. It's not like they go to jail and you can throw the contents of the house out on the street for the garbage man. Also, the woman was evicting based on drug use that the police would not do anything about, they paid rent on time every month. The Judge still has to grant your eviction. What if the Judge denied it?
Yes I did. And what a waste of time. The "reporter" mentions the tenants hair dye color 3 times.....for no reason. The tenant's father was a detective in another muni and known to the local police. Enough said.