All Forum Posts by: Michael Cohen

I meant add it back in as far as calculating your income. You don't have to re-file your taxes; this is a separate issue. This is about trying to determine your qualifying income. Your lender can add back in a portion of your deductions to help determine a higher qualifying income.

As a mortgage lender, I see this frequently. Deductions have to be taken into account, but some can be added back in. Lender versus broker makes no difference: both have to follow the Fannie Mae/Freddie Mac guidelines. The key is knowing what can, and cannot, be added back in and still follow guidelines. If you bring in $100,000 in gross revenue but are telling the IRS that you have $60,000 in deductions which are unavoidable, so your netting $40,000 in income, your gross income is $40,000. Anything different is tax fraud and mortgage fraud. Not something to play with.

Welcome to the BP community and RE community. What broker agency did you go with?

And to @Antoine Martel 's point: while FHA rates are lower, MI is much higher so your APR (overall payment) is typically higher. Also, that MI never goes away on an FHA loan so you usually will want to refi out of the FHA.

@Ricardo Cristobal - The down payment for owner-occupied primary residences are:

Fannie Mae:

• 1 unit 5% (or 3% for FTHBs)
• 2 unit 15%
• 3-4 units 25%

FreddieMac:

• 1 unit 5% (or 3% for FTHBs)
• 2-4 units 20%

FHA:

• 1-4 units 3.5%

VA:

• 1-4 units 0%

Maybe I missed where you said this was an investment property.  Is it?

There is no "best" loan - each has their pros and cons. I wouldn't suggest you spend a lot of time researching the ins and outs of each one and then determine which fits your needs - that's backwards.  Talk to a lender about YOUR situation and let him/her put you into the right product to fit your needs.

@Tommy Reuben - each loan type has occupancy seasoning period, meaning the length of time in which you agreed to live in the home that you signed in your closing documents. Typically it's 12 months.

@John Morgan  

The most common renovation loans are

1. FHA 203K
2. FreddieMac Renovation Loan (they really thought outside the box for that name...)
3. Fannie Mae HomeStyle

Renovation loans really are an animal unto themselves, so I highly recommend you work with a lender who specializes in them.

Essentially, there are two types of standard residential loans that national lending institutions follow: conventional and government.

Conventional: the loans whose guidelines follow those set forth by Fannie Mae and/or Freddie Mac.

Government: loan products insured or backed by various Federal agencies, such as FHA loans (by HUD,) USDA loans (by Dept. of Agriculture,) VA (by Dept. of Veterans,) etc. which have their own rules and regulations.

We (Movement Mortgage) lend both conventional and government loans. Outside of those two types, there are the non-standard lenders, such as hard money lenders, private lenders, etc.

https://entp.hud.gov/idapp/html/f17cnsltdata.cfm