All Forum Posts by: Stephanie P.
Stephanie P. has started 186 posts and replied 4622 times.
Post: Lending Most Cash Out Refinance less seasoning, and delayed financing
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
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We broker financing to a bunch of lenders and they all have different guidelines, so we tailor them to the borrowers. We can go to 80% on cash out with 6 months seasoning. We can go to 75% on cash out after 3 months of seasoning. Both are DSCR loans with no DTI considered. Everybody does delayed financing if bought with cash using the purchase price as the value, not the appraised value. Remember, the higher the loan to value, the higher the rate and you run the risk of not hitting the required DSCR number.
Stephanie
Post: What percent should closing costs be on cash out refi of $140K
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
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Quote from @Toben B.:
Hello,
I have 3 duplexes to cash out refi on. All are worth $200K. One is free and clear, one I owe $5K and one I owe $35K.
What should closing fees, points, appraisals add up to? I am seeing $7400-$8400 in closing cost options. That is around 4.5-5.2% of the loan and seems crazy high to me. Where should these number be?
At 6.75 % - $7330
$4,329.00 Closing costs
$25.89 prepaid costs
$2,975.00 discounts which I assume is another word for points
At 7.125 - $6281
$4,329.00 Closing costs
$27.33 prepaid costs
$1,925.00 discounts/points
Do these look right?
Thanks in advance!
Not all points mean the same thing.
Discount points are to buy the rate down.
Origination points are to pay the broker.
Our compensation for originating a loan is different than conventional lenders because everything we do is considered "Borrower Paid Compensation", but looking at the costs as a percentage of the total on a DSCR loan is not really the best way to do it.
I can only use my company as a gauge, but we charge 2 points on our loans. Big or small, high interest or low interest, we charge 2 points. That's just one way to keep the whole thing fair and easy to explain. Now, does that 2 points always show up in the form of borrower paid compensation? No. Sometimes the 2 points is financed and sometimes we get yield spread instead of coming out of the loan proceeds, but all the time the borrower is somehow paying 2 points. Do some companies charge more? Absolutely. Do some companies charge less? Not many, but maybe. Do some companies try to say they don't charge any points by hiding it in Lender Paid Compensation? On conventional loans, absolutely they do.
The 2 points we charge doesn't come into play when it comes to discount points or lender points. Those are to buy the rates down and are charged at the borrower's request.
Post: Frozen and discouraged
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
- Posts 4,876
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Quote from @Ashley Sanchez:
Hi there!
We just recently got approved for a HELOC on our main residence in order to buy our income property. Unfortunately, the appraisal did not come back as high as we wanted it to and it looks like we are ending up with about 125K as opposed to the 165K we wanted.
My question is this; originally I was thinking 165K could buy us something outright. Now however, at 125k, I think we are looking at more of a down payment. How will we get approved for a second mortgage though, when we still have our first and now the HELOC on top of that? Is that even doable? I just can wrap my head around a bank approving us for a second mortgage on something with a first mortgage and maxed out HELOC. Our income is 150k gross, and we have student loan debt (50k) but that's it (no car notes, etc.)
Can someone help me understand what we should do next? I’m feeling discouraged
Hey Ashley,
Buying one property outright with a HELOC is not the right move anyway. Use other people's money to scale your business. Maybe not in St. Petersburg, but there are a ton of markets where properties are cash flowing very working well.
I just priced out a 2 unit building in Pittsburgh. Its a beautiful Craftsman style home. The purchase price is 210,000. With 25% down, the out of pocket expense will be about 60K including closing costs. Get this; the taxes on the property are $444 per year. The monthly payment at 7.625% on a 30 year fixed would be about $1195 all in. The property brings in $2400 per month ($1200 per unit). That's $1205 per month (I know that's not taking any capex or management fees or vacancy into account). With your HELOC, you could buy two of them using DSCR financing.
Any additional questions, feel free to PM me.
Post: Are there lenders that specialize in STR and MTR?
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
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Quote from @Jason Bowden:
Hey Cherie, there are a number of DSCR lenders that'd be able to help you out with that.
@Jason Bowden Please let us all know which DSCR lenders will lend on 35 acres.
Post: Why would an investor want to use private/hard money? Good to know!
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
- Posts 4,876
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Quote from @Erik Estrada:
Quote from @Ned Carey:
@Wouter Erwee This is my gripe with using the term "Private lender" for people or institutions that are professional lenders. A true private lender wont advertise, they are your friends family and associates that lend to you because they know and trust you.
How can anyone call themselves private when they advertise? It is a stupid use of the term and misleading.
What would you consider Civic Financial?
I'd like to take a crack at answering that.
Civic is not a private lender any more than Conventus or Lima One or even Finance of America. They all do hard money lending, but sell (or sold depending on if Civic makes a come back or not) their loans off in bundles so to me, they would be considered institutional.
An example of a private lender is your Uncle Billy who has some cash laying around or the local concrete contractor that's made a killing and is tired of getting 2% on his savings. It's the sole 401K folks who want a better return. It's not the Civics and Kiavis and Lending One's of the world.
Post: Investor Friendly Lender
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
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Quote from @Sam Singh:
Hello,
I was looking for investor friendly or local banks to get loan for my upcoming two foup-plexes.
Any recommendation? Mcallen, Edinburg or Mission, tx cities
Before going DSCR (spoken as a DSCR broker), expend all of your conventional resources first. The money is cheaper although more cumbersome to access.
Stephanie
Post: Assuming loan with no cash flow. Good idea?
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
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Quote from @Michael C.:
I have been identifying properties that I can purchase with little money down by assuming the current loan. Multiple markets not just Denver.
The benefit is a small down payment to secure the property and assuming the current loan with a much lower than market rate.
The problem is the sales price is still pretty much market price and the monthly payments are within a few hundred dollars of the rental price. I am looking at mostly turn key newer builds that have sold within the last year or two that loan balance is at market price with the dip we are in. More or less I am able to buy at a 2021 price and terms.
Does it make sense to purchase a property with little money down if it just breaks even or possibly might incur a small loss if counting management/capex/repairs?
example $10-15k to take over a $350k loan. Payment $1900. Rent $2150.
If thinking long term I think it makes sense as rents increase. Market may also keep going down for a bit which is worrisome.
Please let me know your thoughts and poke holes in my idea.
There's a reason that hard money loans, even with their high interest rates and fees work. They work because the principle of keeping your max loan to the after repair value below 75% because that ltv affords you options to either sell or get into a different loan vehicle for a long term hold. Above that number, you have to have cash flow to justify ownership.
One girl's opinion.
Stephanie
Post: Are there lenders that specialize in STR and MTR?
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
- Posts 4,876
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Quote from @Cherie Tormey:
I have a mountain property in mind, near a great wedding venue and a great Mountain town and recreation area, mostly in the summer. I would like to offer STR, MTR. There are 35 acres and I would likely put a trailer/camper for myself on the property. Are there lenders that specialize in helping to make this happen?
Thank you!
Post: How to refinance a 4 plex apartment
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
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Quote from @Kyle C thomas:
Need help finding a lender that will refinance a 4 plex apartment building to pull out cash? Bought last year with seller financing and can’t find lender that will lend, my personal credit is not that good has been the reason? Thanks for the help
What's your credit score and what loan to value do you need? Lower loan to value is going to get you less cash, but get you away from the seller if that's the goal.
Post: DSCR "Rural" lending
#5 Mortgage Brokers & Lenders ContributorPosted - Washington, DC Mortgage Lender/Broker
- Posts 4,876
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Quote from @Tanner Johnson:
So I have been having a lot of trouble getting a cash out loan on one of my properties I own outright, and I thought DSCR lending was going to be my saving grace. Well turns out pretty much my entire investing area is considered "rural" even though this specific property is right in the middle of a 30,000 population town and most DSCR lenders will not loan on it because of this. Has anyone ever found a way around this as I really need this to happen if I am going to scale. Conventional lending is not really an option as I am a college student and dont have much W-2 income at this time.
Is this the property that you built with a wooden foundation and what specific town is it in? Curiosity is getting the better of me and I want to check population density.