All Forum Posts by: Paul Defngin

In my experience, it is pretty standard for second lien lenders not to allow for a non-occupant co-signor. I would be curious to know if you do find one. Keep us updated and post if you find one as I imagine that will be helpful to many thinking about the same thing you’re looking into. 

I agree with @Brad Jacobson on this too. If I were in your shoes I would definitely lean towards the HELOC. I would do the upkeep in stages and based on what you can afford to pay at Prime plus 2-3%, not the true 1%. This way you can anticipate and worse case scenario, in the event that Fed keeps increasing rates in the next year or so.

Also I would look into seeing if the credit union based their payment on interest only on the balance drawn or if they use a fixed percentage.  I prefer the interest only to keep the payment as manageable as possible, and give me the flexibility to pay more towards it as I see fit. 

Most credit unions nowadays use a fixed percentage like 1-1.50% of the balance which is great because a portion goes towards principal but for me; I prefer the IO option. 

For the deed just provide the credit union copies of the death certificates and the deed for the chain of title. 

Good luck. 

@Raymond J. Rodrigues good feedback.  Maybe? Unfortunately, for us on the retail side, once you disclosed, you are obligated to give it regardless of whether you locked the loan or not.  On the broker world, if you are not locked and you're on a lender-comp plan; I can see how that could happen. Let's just hope that if she was not locked that it was explained to her in-depth. That said, it looks like her loan was locked but nonetheless, hopefully @Maria W. got her loan, was taken care of and happy.  That's all that matters. 

Quote from @Maria W.:

Here is the conversation via text that verifies the lender was going to cover his origination fee. He highlighted both origination fees and lender credits to show me what he would do and how I would bring less to closing. This was the determining factor in me choosing them to service my loan. 

I can't make out the screenshots of what you posted here - and you may have already closed anyway.  Hopefully, all ends up the way you expected and everything is good.  

Go back and let them know that. If a lender disclosed a lender credit; they can’t undo it. They are then obligated to give it to you. That is one of those things that CFPB is specific about and is a zero tolerance line item. 

Be aware that some lenders may say; “oh we extended your rate and used that to cover your lender credit”, if that is what happened, push back. The two has nothing to do with each other and if in fact you extended your rate because of change of circumstances that is not your fault; then I would definitely let them know that. 

Good luck. 

Jason, I am pretty sure that both FNMA and Freddie Mac also have 1-year occupancy requirements.

Both agencies have owner occupancy requirements in place to encourage homeowners to buy properties before investors. So, I’d be careful about your advice of refinancing after 6 months into a conventional and then convert to an investment. I don’t think that is sound advice. The intent of purchasing an owner-occupied is to live in it!

Yes, one can absolutely move out after a year and turn that that into an investment, but what you just described does not align with the intent of owner-occupancy. 

Let’s also not forget that as loan officers we owe a fiduciary duty to our employers, and early payoff of loans on any company’s book is costly but I digress.

6 months in as an FHA and refinance into a conventional and then move out to fully rent the whole building could lead into a whole lot of other problems,

 👀 curious? 

How does it not have an occupancy requirement when he stated it is an owner occupied property?  

@Jason Crowe if your 1099 Tax Return income source is the same type of business as what you previously did, then you can use your Tax Return to qualify.  Of course, I am assuming that your 1099 net income is the same or better than your W-2 earnings from past.  Additionally, the 1099 earnings reflected on your Tax Return should - according to FNMA / FHMLC guideline requires your lender to confirm that the tax returns reflect at least 12 months of self-employment income, meaning your 2021 Tax Return must reflect income earned from Jan - Dec of 2021. If you don't meet this part and don't qualify for the conventional loan option, then you could look at Alt/Porfolio option as long as you can document and confirm that you've been 1099 for at least 1 year and remained in the same industry as what you were doing previously. There may be other lenders out there that offer something different but these are pretty standard.  Wishing you the best and good luck. 

@Amanda Chandler one thought, and I am not an expert on this but maybe try furnished STR and post on Travelling Nurses websites or at the hospitals nearby your home. Is that a possibility?