All Forum Posts by: Michael Cohen

I agree with @Melvin List - it shouldn't have gotten anywhere near that far in the process without your LO knowing it was a 2 unit property. Yes, a 2-unit property absolutely will have a higher interest rate than an SFH.

For the record, these are the eight (8) most common factors (price adjusters) that determine your interest rate:

1. Loan amount
2. Documentation (full, limited, or stated)
3. FICO score
4. Occupancy
5. Loan Purpose (purchase or refinance)
6. Debt-to-Income Ratio
7. Property Type (SFR vs. multi-unit, attached or detached, condo, etc.)
8. Loan-to-value / Combined loan-to-value

Look at that; you learn something new every day. Thanks, @Chris Mason 

Guess that's another perfect reason to pick a good local lender.

@Cassandra J. - You as the buyer select the title company.  To find a good lender, I suggest you get recommendations from friends/family or your realtor. S/He should be experienced enough to have a core group of 3-4 lenders s/he has worked with a lot in the past and knows they do a good job. Prompt response is important - within reason (don't demand a call or email response within 5 mins, or on non-business days, etc.) but you are spot on: they should be totally transparent regarding the process and fees. They should make you feel knowledgeable about everything. that's the most important part in my opinion.

Pre-qualified: talking with a loan officer about your income, assets, and credit and based on what you say, she/he issues a pre-qualification. Basically worthless. Pre-approved: loan officer runs your credit, and analyzed supporting documents, such as pay stubs, bank/asset statements, tax returns, etc. only as good as the knowledge and skill of the particular loan officers ability to determine qualifying income. Loan Commitment: an underwriter analyzes a buyers income and assets, and gives approval on the borrower The subject property must still pass appraisal and title, but borrower is fully underwritten.

@Justin Cory - I'm afraid not. The VA loan assumes you intend to occupy the property for at least 12 months. In your situation, you do not intend to do so because you already have orders.

@Maya Dib @Justin Cory - VA loans are intended for owner-occupied, however, the needs of active duty military are considered, so if you do get orders, you are not in violation of the owner-occupied requirement. This is very common with VA loans.

Four is the standard, however, there are some traditional lenders that allow a borrower to have up to 10 financed properties. Embrace Home Loans is one.

@Javier Fernandez - the number of credit lines is important, as is the length of credit, etc. It's all a component of your credit profile (score + history) that will determine if you're qualified and what your rate will be.

Also, while the mortgage application requires a two-year employment history, college is considered employment history so you would be qualified.

@Javier Fernandez FHA DTI is more of a guideline, unlike Fannie/Freddie, which are rules, but has been eligible to go up to 50% (often higher if necessary) for quite awhile. Your lender will run your file through their automated underwriting and if they get an "Approve/Eligible" then you're qualified. I've gotten A/Es to 55% DTI.

The bigger concern is how you're calculating your DTI. Qualifying income must be properly calculated using your work history, industry, pay stubs, W2s, etc. Also, your credit card minimums will be counted against your debt for the debt-to-income part.

 PM me your info and I'll give you a rough idea of how your income would be assessed.

I agree with @Chris Mason . Even though it's 5% down rather than 3.5%, you're not also paying for the upfront MIP. Ends up being the same and a much better loan. The only benefit of FHA will be the DTI allowed is higher on FHA if that's an issue.