All Forum Posts by: Stephanie P.

That would be considered a high cost loan and not work for a primary residence.  It's a really dumb loan.

Do a DSCR loan for the rental properties and take cash out to 70% loan to value (LTV reduced because they're listed and you'll have to pull the listings). Pay for the primary residence with cash from the refinances. Your rate should be in the high 4's and low 5's, not 12% and certainly not encumbering 3 properties as a blanket at that rate.

Local or national doesn't matter for DSCR loans. Most local guys can lend in about 36 states that don't require licensing for DSCR loans.

That url says brrrr.com is owned by Orbit Commercial Capital and Orbitcc.com is an active website.  I've never heard of them or used them, but that doesn't mean they don't exist or do loans.

If it feels hinky, try another broker.  There are several out there that can do it.

Stephanie

$23,000 seems pretty high. What's costing that much money? Are you paying origination points? Can you renegotiate the contract higher to get the seller to contribute toward closing costs? I just closed a 509K purchase in Maryland at 95% loan to value. The borrower put down $3500 EMD and only had to come to the table with the down payment $25,450 and about another $8,000 for a total of $34,000 +/-. The seller paid all the transfer taxes and doc stamps. Transfers and docs came to about $9,700.

I would do a couple things.

1. I would renegotiate the sales price to include seller contribution of up to 4% of the non-recurring closing costs.  I don't know your sales price, so you do the math.  Understand that ALL of this is just a math problem
2. I would speak to my lender and have him/her explain the rate range for my loan. If you're house hacking, I'm assuming you're using conventional financing or FHA if the property includes units. Either way, rates for loans in the conventional or FHA world are provided in a range. There's a "par" rate where it doesn't cost the borrower any money and they get no lender credit. It's almost never exactly par, so there's always either some lender credit or a little cost. Raise the rate up and you get lender credit to cover closing costs. Get a lower rate and you have to pay for it in points. In the case of the loan I just closed, there was a $233 lender credit. Once you know the rate range, see how high you can get the rate without blowing your debt to income ratio and how much lender credit you'll get for it instead of paying points.

That's what I'd do.

Hope that helps

Stephanie

Thanks Kerry.

Keegan,

You need a DSCR loan from a broker that does them. The lender you're talking to is obviously limited to conventional financing and you won't qualify there.

Stephanie

Within the first 6 months, delayed financing will only allow up to the purchase price, not the new appraised value right?

In order to get Fannie Mae backed money, you have to wait at least 6 months.  Why?  Because he who has the gold makes the rules.:)  The real answer is to prevent churning or constant refinances in an appreciating market because the secondary mortgage market is built on mortgage backed securities and lenders would have to pay their yield spread back to the investors if the loans kept coming out of the security.

You can go with a DSCR loan that doesn't require 6 months seasoning, but the terms are not as favorable as they would be if you waited and since you're playing the long game with the property, it's best that you wait.

80% is available, but again, the terms are not nearly as favorable as they would be at even 75%.

@Taylor Rees

Cost is the main reason to not do this.  You'll pay transfer taxes in most jurisdictions, so the cost can be onerous.

Stephanie

This does not exist.

DSCR loans don't require tax returns or paystubs. This will be the way for you to go. Contact a good DSCR broker to start the process.