All Forum Posts by: Stephanie Medellin

5-10 units is considered commercial, and will generally require 20% or more as a down payment.  You should also ask the lender if they will permit you to owner occupy the property, since many commercial loans are not designed to be "consumer loans."

If the funds are coming from an acceptable source, they don't necessarily need to be seasoned in your account for any length of time.

The cost is quite high considering your scenario, however, that's based on a shorter rate lock period.  Not all lenders will lock for an extended period of time.  If this quote gives you the option to lock your rate until the expected closing this fall, the long lock could be contributing to the high cost.  

Not all lenders have pricing adjustments for 5-10 properties, and as mentioned already, it wouldn't be a large cost.  It's built into the interest rate so you really wouldn't even be aware of it, and a lender that has this adjustment could still be cheaper overall compared to lenders that don't.

There are so many other factors that could have made the loans more expensive, from market conditions, higher LTV, change in credit score, change in lender, property type, etc.

HELOCs and HELOANs are available on investment properties. The (LTV) percentage you can borrow is lower than a primary residence loan, but still available.

@Joshua Thang  Appraisal transfers are definitely possible depending on who ordered it and if it meets compliance requirements, but I've never heard of a lender accepting someone else's credit report.  Lenders typically monitor your credit through closing, and they wouldn't be able to do that with a copy of a report ordered by someone else.  If there aren't significant changes to your credit over the past month, it shouldn't cause a problem to pull a new report.

This is possible on conventional loans if the lease term has at least 5 years remaining at the end of the mortgage term (i.e. a 25 year mortgage would need at least 30 years remaining on the lease), among other requirements for the lease.  Happy to have it reviewed for you to see if it meets guidelines.  

 Even if you don't have an existing mortgage, you can do a cash out refinance.  A home equity loan is also a type of mortgage.  A mortgage is really just the lien placed on your property to secure the debt, regardless of the terms (i.e. 1st or 2nd lien, etc.).

To qualify for a conventional loan, you'll need a minimum 620 credit score for all borrowers on the loan.  Free credit scores do not use the same scoring model as credit scores used by mortgage lenders, so what you see on something like credit karma isn't really reliable for mortgage purposes.  That being said, those scores are usually higher than mortgage scores.  

FHA loans allow lower credit scores, and are a good option to buy multi-unit properties with 3.5% down. 3-4 units will need to be self sufficient - 75% of the rent for all units must cover the PITI payment. That's one requirement for FHA that isn't needed for conventional loans. How challenging it is to meet the self-sufficiency test will vary in different areas of the country .

It would be worthwhile to apply for a pre-approval with your father and let the loan officer give you some options. Ask them to qualify your father alone conventional vs. FHA, and then see what you could qualify for jointly.

If your credit cards are maxed out, spending your money to pay them down could be worth more in terms of qualifying with a higher credit score.  If your score is low for other reasons, or if your monthly payments are low, it might not make much sense to pay off your debt for qualifying purposes.  Again, this is something a loan officer can help you with after they see your application and income documents.

Yes, you can pay off debts through the loan and those monthly payments won't be factored into your debt to income ratio. Assuming this lets you qualify, you'll most likely get a better rate with a conventional loan compared to a DSCR loan.