All Forum Posts by: Paul Cordero

It really depends on how long you plan on keeping the loan. If you are going to keep it for the long run, rolling it in may only be a few more dollars added to your monthly payment, but how much is that few dollars adding up to over the long run?

On the other hand, you also want some post closing liquidity. You may want to keep your money in a reserve account for repairs, etc.

One more thing, if you decide to cover all loan costs out of pocket, your APR should be equal to your interest rate quoted. APR is usually higher when you are rolling costs into the loan amount.

Great deal, I would jump on it and lock it in

Most lenders did away with the 40 year amortization term. It was a 30 year loan with a balloon payment due at end of that term.

I don't think these loans are desirable to most investors purchasing in the secondary market.

It really depends on the state you are in. Here is a link I use to estimate title insurance/closing costs, recording, doc fees, etc. - state specific.

http://tfc.firstam.com/Calculator

You will also have an origination charge, whether that be a flat fee, or percentage of the loan, it will also vary. Ours is a flat fee by state, but ranges from $700-1000. We never charge points unless the borrower wants to discount their rate.

There could also be escrow account setup reserves, or taxes/Home Owner's Ins., etc that would need to be paid at closing.

Most lenders require the appraisal fee paid up front if an appraisal is required (HARP, FHA Streamline, usually don't require an appraisal). That also varies, but for your loan size, and it being an investment property, I would estimate about $600. Most lenders are going to want rental comparables and rental income analysis from the appraiser which is going to cost more than your typical appraisal.

If closing costs are a concern, the lender may give you a credit for closing costs depending on the rate you choose, or to earn your business.

Connect with me if you would like to know more.

Mike,

As long as you have income from the same type of job over the past two years (which you do) and the likelihood of that income to continue is good, you should have no issues with getting qualified for another mortgage.

Most banks will take an average of your current monthly YTD avg. gross with the past two years of income from a W2 or tax return. Without knowing your year to date gross pay, I would just average your last two years of $70K and $63K for a monthly income figure of $5541. I am not sure if your two revolving accounts listed above have a min. monthly payment, but assuming they dont, the only other payment that will get factored into your DTI is your current mortgage Principal, Interest, Taxes, Insurance, and Association (PITIA).

If most lenders max out at 45% DTI, you can afford $2,493.45 for loan payments. Subtract out your current mortgage and any payments for your revolving accounts and this will give you the max monthly PITIA that you can afford for the investment property. Remember that you will also need to put down at least a 25% down payment with most lenders.

I hope this helps,

Lending Tree is not a bank or lender. They are a marketing/lead generation site for brokers and other banks.

I have to agree with Bill on developing a relationship with a mortgage banker over getting a mortgage with these big online origination companies like Amerisave and Quicken Loans.

If my clients have a problem with their loan two, five, ten years down the road, they call me because they know I will be able to deliver on my word. Good luck doing this with a company like Amerisave.

Hillary Hirche

Ocwen "Specializes" in "At-risk" loans. That doesn't mean that they don't service good loans too. A special servicing company like Ocwen makes more money to bring a delinquent loan current over keeping a good loan current so this is appealing to investors who are looking for portfolio performance.

Furthermore, you really have no control over the servicing rights of your loan being sold to another servicing company after loan origination if your loan is within the conforming loan limits (FNMA/FHLMC). You would have to refinance with a bank that has a portfolio program, or non-conforming type program, and they are usually going to have a higher rate than a standard conforming product.

When servicing transfers take place, there could be hundreds of thousands of loans that need to be boarded to the new servicer which means all past/present info/docs/etc. would need to be transferred as well. There are always user errors during this process. Although I would love everyone to refi with me, this may not solve their servicing problems in the end.

You can get a 5/1 ARM in that range for investment properties. When you say 30yr mortgage, are you meaning "30 yr fixed"?

You can finance investment (rental) properties with conventional financing.

I would see if your family friend can gift you the entire 10%, explaining that it is a gift in writing and repayment is not required. A gift letter of this nature along with sourcing the funds should suffice for most banks.

Most banks won't allow a private loan for the additional 5% as valid money towards the down payment. Either they will not accept the funds at all, or they will require you to provide a contract with the loan terms. This could change your combined loan to value which may have an impact on the bank's ability to give you the loan (according to their guidelines).

When was this? Rates have most likely gone up. They have been steadily increasing over the past few weeks.