All Forum Posts by: Logan Padilla
Logan Padilla has started 0 posts and replied 19 times.
Post: No prepayment penalty vs 3 yrs vs 5 yrs for current market
- Posts 19
- Votes 7
Quote from @Hyeseong Park:
Quote from @Logan Padilla:
Quote from @Hyeseong Park:
Quote from @Logan Padilla:
Quote from @Hyeseong Park:
Quote from @Logan Padilla:
Quote from @Andrew Postell:
@Hyeseong Park yes, the closing costs are usually rolled in....but those are still costs. It's not "free" to refinance. So, if I save $25 per month on my payment...and it costs me $10,000 to refinance...then it would take me 400 months just to break even. And a 30 year loan is only 360 months. Keep in mind that lenders will try to "sell" you lots of things...always look at the true costs of what those things are. You do have to show bank statements to satisfy the reserve requirement for any DSCR loan...your lender should be able to tell you how much you need in "reserve" funds before you commit to them.
Hope all of that makes sense.
Just to clarify, this may be the case with Guaranteed Rate, but bank statements are absolutely not necessary if you have funds in other accounts.
Also, I'm not sure what the line "lenders will try to 'sell' you lots of things" means. There isn't really much to sell. We should play much more of an advisory role rather than that of a salesperson. Lastly, every lender should be going over all fees associated with a new loan. No one likes surprises at the closing table.
What if I don't have any other assets? I heard that they usually go with 6 months reserve if I don't have any other assets to show besides my bank statement. What does 6-month reserve exactly mean? Do they take out 6-months of PI amount from the amount that I'm going to borrow?
6 months of reserves means you need to have 6 months worth of payments (principal, interest, taxes, insurance + mortgage insurance and HOA, if applicable) in your account after closing. If you're doing a cashout refinance, you can use the cashout amount towards your reserve requirement.
Is there a specific reason you don't want to use bank statements for assets? I'm also happy to discuss this with you offline, if you would like?
I just "can" use the cash out funds towards your reserve requirement or I "have to"?
Post: No prepayment penalty vs 3 yrs vs 5 yrs for current market
- Posts 19
- Votes 7
Quote from @Hyeseong Park:
Quote from @Logan Padilla:
Quote from @Hyeseong Park:
Quote from @Logan Padilla:
Quote from @Andrew Postell:
@Hyeseong Park yes, the closing costs are usually rolled in....but those are still costs. It's not "free" to refinance. So, if I save $25 per month on my payment...and it costs me $10,000 to refinance...then it would take me 400 months just to break even. And a 30 year loan is only 360 months. Keep in mind that lenders will try to "sell" you lots of things...always look at the true costs of what those things are. You do have to show bank statements to satisfy the reserve requirement for any DSCR loan...your lender should be able to tell you how much you need in "reserve" funds before you commit to them.
Hope all of that makes sense.
Just to clarify, this may be the case with Guaranteed Rate, but bank statements are absolutely not necessary if you have funds in other accounts.
Also, I'm not sure what the line "lenders will try to 'sell' you lots of things" means. There isn't really much to sell. We should play much more of an advisory role rather than that of a salesperson. Lastly, every lender should be going over all fees associated with a new loan. No one likes surprises at the closing table.
What if I don't have any other assets? I heard that they usually go with 6 months reserve if I don't have any other assets to show besides my bank statement. What does 6-month reserve exactly mean? Do they take out 6-months of PI amount from the amount that I'm going to borrow?
6 months of reserves means you need to have 6 months worth of payments (principal, interest, taxes, insurance + mortgage insurance and HOA, if applicable) in your account after closing. If you're doing a cashout refinance, you can use the cashout amount towards your reserve requirement.
Is there a specific reason you don't want to use bank statements for assets? I'm also happy to discuss this with you offline, if you would like?
Post: No prepayment penalty vs 3 yrs vs 5 yrs for current market
- Posts 19
- Votes 7
Quote from @Hyeseong Park:
Quote from @Logan Padilla:
Quote from @Andrew Postell:
@Hyeseong Park yes, the closing costs are usually rolled in....but those are still costs. It's not "free" to refinance. So, if I save $25 per month on my payment...and it costs me $10,000 to refinance...then it would take me 400 months just to break even. And a 30 year loan is only 360 months. Keep in mind that lenders will try to "sell" you lots of things...always look at the true costs of what those things are. You do have to show bank statements to satisfy the reserve requirement for any DSCR loan...your lender should be able to tell you how much you need in "reserve" funds before you commit to them.
Hope all of that makes sense.
Just to clarify, this may be the case with Guaranteed Rate, but bank statements are absolutely not necessary if you have funds in other accounts.
Also, I'm not sure what the line "lenders will try to 'sell' you lots of things" means. There isn't really much to sell. We should play much more of an advisory role rather than that of a salesperson. Lastly, every lender should be going over all fees associated with a new loan. No one likes surprises at the closing table.
What if I don't have any other assets? I heard that they usually go with 6 months reserve if I don't have any other assets to show besides my bank statement. What does 6-month reserve exactly mean? Do they take out 6-months of PI amount from the amount that I'm going to borrow?
6 months of reserves means you need to have 6 months worth of payments (principal, interest, taxes, insurance + mortgage insurance and HOA, if applicable) in your account after closing. If you're doing a cashout refinance, you can use the cashout amount towards your reserve requirement.
Is there a specific reason you don't want to use bank statements for assets? I'm also happy to discuss this with you offline, if you would like?
Post: No prepayment penalty vs 3 yrs vs 5 yrs for current market
- Posts 19
- Votes 7
Quote from @Andrew Postell:
@Hyeseong Park yes, the closing costs are usually rolled in....but those are still costs. It's not "free" to refinance. So, if I save $25 per month on my payment...and it costs me $10,000 to refinance...then it would take me 400 months just to break even. And a 30 year loan is only 360 months. Keep in mind that lenders will try to "sell" you lots of things...always look at the true costs of what those things are. You do have to show bank statements to satisfy the reserve requirement for any DSCR loan...your lender should be able to tell you how much you need in "reserve" funds before you commit to them.
Hope all of that makes sense.
Just to clarify, this may be the case with Guaranteed Rate, but bank statements are absolutely not necessary if you have funds in other accounts.
Also, I'm not sure what the line "lenders will try to 'sell' you lots of things" means. There isn't really much to sell. We should play much more of an advisory role rather than that of a salesperson. Lastly, every lender should be going over all fees associated with a new loan. No one likes surprises at the closing table.
Post: Is there any lender that doesn't require bank statement for DSCR loans
- Posts 19
- Votes 7
Quote from @Hyeseong Park:
If anyone knows, it would be great to know some lenders who don't require it as my house is free and clear! (no debt in it) I found some lenders do this so hope you don't say "Most lenders will go with bank statements". (I know it :))
If the concern is that they will look at deposits, that won't be the case. Statements are used for reserves; however, as previously mentioned, if you have liquid assets in other accounts, you can use those instead.
Post: No prepayment penalty vs 3 yrs vs 5 yrs for current market
- Posts 19
- Votes 7
Quote from @Hyeseong Park:
What is the best option for prepayment penalty you think these days if I want to go with DSCR loans?
I assume that there is a big chance that the rate can drop a bit more due to elections at the end of next year so govern may decrease the interest rate. which means I should probably go with no PPP and do refinancing next year? what do you think the trend will be?
We have a no PPP DSCR product that also offers highly competitive rates in the arena.
We anticipate rates to continue to fall. No crystal ball, of course, but getting in with no PPP and refinancing in 12-18 months is a solid strategy.
Post: DSCR Loans with none to very little seasoning
- Posts 19
- Votes 7
Quote from @Collin Mitchell:
Does anyone have a lender that does DSCR with a short seasoning or no seasoning?
Im doing BRRRRs in St Louis and the rehabs are pretty short 2-4 weeks.
Im looking for options to pull my cash out faster
We have a DSCR product with a 30-day seasoning period.
Post: Best insurance companies for single family rentals?
- Posts 19
- Votes 7
Quote from @Henry Lazerow:
Curious what companies most BP users using for insurance on single family rentals feel free to PM if prefer. Thank you
Henry -
I work with a great insurance broker who is always able to get my clients a great deal.
I tried to post his info here, but BP won't allow it. Feel free to reach out and I'll share his contact info with you.
Post: Dilemma - buy our own condo or go back home
- Posts 19
- Votes 7
Quote from @Sharon Supera:
Hello BiggerPockets community,
I’m grappling with a significant real estate decision and would appreciate your insights. Here’s the situation:
We own a detached home with 2 units, consisting of a legal 2-bedroom basement and a 4-bedroom, 3-bathroom upper floor. Purchased 14 years ago for $500,000, the property is now valued at $1,500,000. We rented it out 6 months ago due to our need to move to a more accessible condo for a family member with a recent physical disability. The current rental income is $5,300/month, while our mortgage is $1,500/month, property tax is $600/month, property management costs $200/month, and maintenance expenses are currently unknown.
We've utilized a HELOC from this property, amounting to $300,000, for renovating the basement and investing in a preconstruction condo and another property in a different city. Currently, we're renting a condo for $2,600/month, and while we wish we were putting that money towards our own condo, our funds are tied up in the preconstruction condo and the out-of-city rental property. Unfortunately, we can't sell the preconstruction condo as it won't be completed until 2027.
Given our situation, we need the accessibility of a condo for our family’s needs, and the idea of returning to our home is daunting, both for maintenance and our compatibility with living alongside tenants. I don’t have funds for a condo down payment unless we sell the other property to free up cash.
My dilemma is whether to keep the house and wait for the market to reach $2 million, go back and live in it, or explore other options. I would greatly appreciate any suggestions or recommendations you may have.
Thank you for your valuable insights!
Hi, Sharon -
As mentioned above, the concern with selling your property is letting go of an income-producing asset; however, if you sell the property, you will increase your liquidity substantially. With a portion of the net proceeds, you could purchase a multi-unit property with only 5% down. You could live in one unit and rent the others, which would still provide income. Once the condo is complete, you could move into it and rent the unit in which you were living, increasing your cash flow. You would still end up with an investment property AND the condo you need. While you would still living alongside tenants to a degree, you would all have your own units rather than sharing a space.
I hope this helps!
Quote from @Jen Pitassi:
Hello everyone! I am looking at buying real estate in Columbus, Ohio. Does anyone have recommendations on finding information about growth equity in a specific area? Maybe there is a website or resource that has been helpful?
Thank you for looking!
Feel free to reach out. I can run a full, comprehensive report on any areas in which you are looking to give you an idea of what the growth equity looks like for each.