All Forum Posts by: Derek Brickley

Hey Mike!

Yep actually pretty common depending on what kind of deal you're looking at.  Feel free to reach out if you have questions on how that works or the tradeoffs!

Hey Aswin!

I might be biased, but I think you'll love it.  My background was in data science, statistics, and economics (mainly econometrics) and I couldn't have landed in a better place.  A lot of carry-overs that make it easier for us to understand the markets and pricing (the numbers tell a story).

You may want to work to find a company that will bring you on as an LOA for a short time while you're getting licensed (and maybe they can help sponsor your testing).  If not that works too, highly recommend MLO Study Buddy as a resource but any and all practice exams you can find will be helpful.  I'm up in Michigan, but we do have a few branches in your area I believe so if it's helpful to connect with someone local happy to make that connection.  

Biggest challenges: ...everything haha, even if you're a quick learner and can adapt on the fly building a book of business takes a lot of time and effort (still working on it).  Leverage your network and the knowledge you have now to set yourself apart in some way.  Once you get a basic understanding of the concepts, make sure you have a team who can support you and then hit the phones! 

Hey David!  For a while at least, you would've seen both those numbers before.  Though the upfront fees are definitely a factor, if I could share my experience (both as a lender and investor)...

APR is meant to be an annualized reflection of the total costs incurred over the duration of the mortgage. So think of it as the total cost of borrowing money. The hard part that a lot of people miss is that this is calculated over 30 years (or whatever your term is for your loan). With rates where they are, I'd expect you don't plan to be in the mortgage for more than 3–5 years (maybe less) depending on where the bond market goes. With that being the case, that APR calculation is SIGNIFICANTLY off. So what you'll want to pay attention to is the total upfront costs and how that impacts your interest rate - I'd encourage you if your lender hasn't already to do a break-even calculation to determine based on your hold and strategy how much costs yield you a positive ROI. With rates being where they are, it's hard to get a positive yield on higher upfront costs over a 3-5 year period.

Hey Abby!

The problem you're going to run into is Fannie/Freddie doesn't allow second home loans on anything but a single family residence (yes can be condo, townhouse, etc. just not 2-4 unit) so you're automatically thrown into the investment loan world.

Hey Zenas! 

Nope doesn't change anything.  Some times you an go 5% borrower contribution, but 10% will open up more avenues for you.  Depending on your deal, reserves may or may not be required to be in your name - although you can use other accounts i.e. 401ks, IRAs, etc. towards that reserve requirement.  Feel free to reach out though if you have questions on how that could work.

Hey Mark!  

Yes we definitely do and you'll probably find a number of us here who could help with that.  Note that the 15% down options of course have higher rates.  As long as credit is good/fair and the debt-service ratio is above 1.0 you shouldn't have any issues with that.  Feel free to reach out if you have any other questions though!

 Got it! Not a problem, it is a county-by-county program including Washington, Allegheny, and Westmoreland counties (program is based on the median income in the area and the sales price) so could still possibly work. Elise Bickel is an investor friendly agent we've worked with, so she may be a resource.

Hey Karolina!  

That sounds really familiar to a few investors we've worked with recently here, do you have an agent already as well?  Pittsburgh is one of the areas where we have a community reinvestment program - basically just trying to reinvest into the community and encourage homeowners/investors to buy in Pittsburgh.  There are a few nuances to the program, but qualifying is exactly the same as conventional (no overlays on our side).  If that might be helpful for you, feel free to shoot me a message, happy to explain a bit more about how that works for investors.

Hey Charlotte,

Saw your other post, but happy to respond to this too. I might be biased - though the easiest way to tell which option works best is to get a side-by-side comparison so you can see the overall costs, payments, etc.  When I did my first house hack, I used a 5% down conventional because I was in a similar situation to you.  

As already mentioned, FHA mortgage insurance would most likely be higher for you than conventional, plus you have the upfront mortgage insurance that would be added to your total loan amount. However, FHA rates will most likely be lower than conventional (but this can be a larger difference for different price ranges)

Conventional mortgage insurance drops off automatically at 78% loan-to-value (or you can request it dropped at 80% loan-to-value with an appraisal) whereas FHA it's on there for the life of the loan. Since generally the benefit of a house hack is to hold the primary residence loan as long as possible, if you hold it long-term, you could still be forced to pay the mortgage insurance 10+ years down the line.

Plus, you can only have one FHA loan (with some exceptions) at a time, so I'd rather use this house hack for 5% down which I can repeat and save FHA for another time. Hope that helps!

Hey Charlotte! 

Yep no problem there as long as things line up timing wise. Closing on the duplex first and then finding a single-family rental works well. If you run into DTI issues as mentioned you could look at DSCR to purchase the SFR. The proposed rent from the income property can possibly help you qualify as well. Plenty of options, though feel free to reach out if you have any questions!