All Forum Posts by: Derek Brickley

It's a huge factor with it... too many people overlook it.  Don't miss the conventional househack with 5% down!

Hey Sam!

We can work a few ways on that, of course you have your 3.5% downpayment but then prepare to have 6 months of reserves set aside.  Then for closing costs in Ohio, another 3% would be a good benchmark to have set aside (not that you need all of it but better to have more than less).  Depending on your goals, you might be able to work to have the seller cover some of your closing costs in which case you could eliminate that cost out of pocket entirely.  Feel free to reach out though if you have any specific questions!

Hey Ilana!

Yep pretty common for sure.  With the investors we're working with right now, time to close from application to close is about 10 calendar days. Feel free to reach out if it might be helpful for you to move quick on it.

Hey Michael! 

Not uncommon, not sure what program you were using or what you're looking for but definitely a few alternatives.  Feel free to reach out if that might be helpful for you though!

There are some options for purchasing/cashing out on a primary that don't look at Debt-to-income ratios.  With the cashout option though, you would need to take the full amount upfront which might not be as beneficial but if you have an immediate use for it then it could be an option for you.  If you have questions on that feel free to reach out!

Hey Elan!

You'll definitely find a ton of people who can help here, hard to say which options could work best but feel free to reach out if it might be helpful for you to look at some of those.

Hey Juliette!

The age old question hahah is your primary residence an FHA/VA/USDA loan or a conventional loan? Conventional I'd argue it doesn't make sense to refinance in most cases unless you qualify for subsidized rates through some sort of program. If you're at 7.25% on FHA/VA/USDA it might make sense depending on your situation. For the rental though there isn't a strong advantage to waiting. As you already know rates would be significantly below that and if you expect rates to drop further you can take a higher rate on the refinance to get a credit to cover all of your costs.

If rates continue to come down, great you can refinance every 6 months (more or less).  The unfortunate aspect we see all too often is when people miss their opportunity to refinance because rates spiked back up and they're forced to keep paying the higher rate.

The way a lot of people right now are balancing this is doing a longer-term rate lock on a refinance - say 45 or 60 days.  This way you're protected from rates increasing over that time period.  Though if rates do improve anytime between when you lock and when you officially close on the refinance, you can get lowered down to the better rate once and that doesn't cost you as a borrower to do.  If it's helpful to go through how that works, feel free to reach out!

That's not too far off unfortunately, we wouldn't even be able to do that on DSCR. Though there is another option we actually just closed for someone in Montgomery with on Friday that gets rid of those costs. Not sure if it would work for you specifically or not but feel free to reach out if it might be useful.

Hey Monica!

Definitely great questions and the short answer is 'it depends' hahah

1. Unless it is absolutely needed, I'm never an advocate for putting more money down.  Even if your rate was 8% (it wouldn't be) you could still invest those additional funds into the market and average out a better return.  Mortgage insurance probably isn't as costly as you might think

2. Seems like only you would know the answer to that question - if you can work an hour of overtime at your job and get $50/hr, if a deal requires you to mow the lawn or something for an hour shouldn't that be valued the same way (I would argue yes).  Consider how much money you could be making doing something else (or how little money you would accept/hr to do something) and compare that to the actual time spent.
3. Vetting the tenants is always talked about in length but it's going to be so important if you or your sister live there.  It's important to find a place you'd want to live (since you actually will) and then that also tends to be important for marketing it as a rental.

Hey Robert!

Looks like you've gotten some good responses, unfortunately that's the risk of non investor friendly lenders.  Just to confirm is it an 1120 or and 1120-S? Income is considered differently for both.  

Either way there are ways to account for that income within guidelines for a few different programs, but if it would be helpful to go through some of those to see if that might work feel free to reach out.