All Forum Posts by: Stephanie Medellin

@Charles Adams No doc loans, as in no income documentation loans, do exist for rental properties. These are loans that don't even calculate DSCR, so you don't need any specific amount of rental income coming in. The property usually has to be in good shape though.

"No doc" does not mean "no down payment" - you'll still need a decent down payment of at least 20% to get one of these loans.

No doc does not exist for owner occupant loans.  You have to show some sort of ability to repay the loan, although I am seeing more lenient interpretations of this rule with new loan programs coming out.  

Is this for a rental property?

@Cody Beard  I believe the requirements may differ depending on whether you're using the guaranteed loan (through a regular lender), or direct loan (directly through the local USDA offices).  Definitely if you're getting the subsidized payments, I think you need to live there as long as you're getting that benefit, which could be indefinitely.  

 I would say the opposite is true - mortgage brokers typically work with several lenders that don't have overlays.  It's more common for wholesale lenders to have FEWER overlays.

It's possible that particular broker didn't go to the right lender, but they only need to find one lender with guidelines that will count the rental income.  Not sure why the loan would have to comply with multiple lenders' guidelines when the loan is only going to one lender? 

 I'm not sure what bank will be looking at your account statements?  Do you mean your bank wants the funds to sit there for a certain amount of time before you can withdraw the money?  Once the loan money is available in your account (through wire or direct deposit), you should be able to access your funds at any time.   

Yes, the payment on a personal loan will usually be much higher than a mortgage payment, BUT it also has a much shorter term.  If you can do without the cash flow for a few years, you can pay off the property very quickly.  Or if you're planning to improve the property to where it will be worth more and have some equity, you could refinance later this year. 

@Zachary P.  Is this a rate and term refinance, or do you want additional cash out?  Primary residence or investment?  Loan amount?  Location?

Interest only mortgages usually come with slightly higher interest rates, but of course the payments are still lower.

@Sheri Lowrance  Can you buy and fix up a property for 80k within a reasonable distance from your home?  Or is it enough for a down payment and renovation funds?

You might get a better education trying a flip on your own, rather than handing over your 80k to someone else to use.  Are they going to have you on site every day participating, working, shopping for materials, and explaining everything that they are doing?  

If you invest the money in a property yourself, you have more control over it and you will really learn the process first hand.  

@Kristopher Shobe  No need to season the funds for purchasing with cash.  Once you borrow the personal loan money, it's cash in your account and can be used at any time.

@Jason Mayers  If you need the rental income to qualify, you will need to have a lease in place.  Always have the tenant pay the rent and security deposit by check and deposit it in your account to document payment.  You will need this for your loan.  

I don't see how it could be much cheaper!

@John Williams  Why are you trying to use a different lender for the second property?  Did you plan to purchase both when you went under contract on the first?  

Whether or not the 2nd loan is with the same or different lender, if buying a 2nd property puts your DTI over the limit for Lender A, putting in an application with Lender B won't change the fact that your DTI is still too high for Lender A. In other words, you need to disclose to Lender A that you've applied for another mortgage for an additional property, and they will need to factor that payment into your DTI.

As @Chris Mason said, one lender should be handling both purchases, and that lender needs to count 75% of the rental income to offset your payments.  Find out if they are counting that rental income.  If your current lender is not  counting it, find a lender that will count it and you probably won't have an issue being approved for both.