All Forum Posts by: Derek Brickley

Hi Pandu,

Were you looking for a "DSCR" type HELOC or a conventional HELOC? Short answer is yes a HELOC is possible on an investment. Feel free to reach out if you have any specific questions though.

Hey Gladys!

For investment financing, there are really two options from a traditional loan perspective. Either conventional investment or debt-service coverage ratio. Your rate on conventional may be slightly lower than DSCR, but there will be heavy points due to the loan-level pricing adjustments. DSCR can have a bit more flexibility as well, minimum 15% down compared to conventional 20% needed (but you will find your terms will be significant better on both options putting 25% down). DSCR also does not look at your income i.e. taxes, W-2, paystubs, etc but rather will look at the potential cashflow of the property. It will definitely be important to find a team (lender, realtor, property manager, etc.) that will be able to help.

Hey Mario, 

If your dad fully understood and was okay with the reverse mortgage that could be an option, however that would exceed my risk tolerance.  As Bill mentioned, you could potentially be a coborrower for him on a cash out refinance to increase his buying power.

Hey Jack!

Like Terrence mentioned, if it will be your primary residence then you can take advantage of the low downpayment options and better pricing. I'm a little confused, are you looking for a 2-4 unit or a single family rental (SFR)? For 2-4 unit househacks, you would have a minimum 3.5% or 5% downpayment for FHA and conventional respectively. Typically, down payment assistance is not available on multifamily properties above 2 units. If you are looking for a duplex, then we would be able to use assistance to help you cover the 3.5% downpayment. One benefit to FHA though, is the large seller concession limit. You can negotiate to have the seller cover up to 6% of the purchase price in your closing costs. Depending on your situation, this is almost for certain what we would recommend looking at first. When using the downpayment assistance, yes it sounds great that you can buy a duplex with $0 down, but your interest rate and fees will be significantly higher. When using the seller concessions, there is no impact to your rates and the seller pays for your closing costs. If you have any specific questions, feel free to reach out.

Hey Timothy, would the HELOC be in your name? And are you on title? Not sure if we could help without knowing a bit more about the situation, feel free to reach out!

Hey Andrea!  Short answer is yes you can, but there would definitely be occupancy concerns that might be difficult to overcome.  You would need solid proof and reason for moving to Cincinnati.  Otherwise, I absolutely think that's a great idea.  Just going to be some hurdles to jump through.

Hi Kevin!

I would agree with the other Derek here that high leverage especially on your primary could have some extra layers of risk. With it being on your primary residence, there isn't really a way to get around DTI requirements. However, depending on your situation there are other ways to possibly raise your income by using bank statements if you were self-employed etc.

Hey Shivani!

Just as others have mentioned, a Debt-Service Coverage Ratio (DSCR) would allow you to potentially get an investment property without dealing with the income verification. You would instead qualify based on the rental income of the property. Minimum down payment ranges from 15-25% depending on the lender. Have you been looking at any properties in particular?

When using a debt-service loan, there is no value seasoning at least with one of our investors.  We go on current appraised value, not costs.

Hey Matthew, is there a reason you wouldn't be looking for delayed financing? I have not had luck finding someone cash out less than 6 months otherwise; sometimes 12.