All Forum Posts by: Varun Parkash

Originally posted by @Peter M.:

I am confused by this post as well. There is no legal limit on how many houses you can own. Are the husband and wife not living together? If the wife buys a home as her primary residence and doesn't move in that is mortgage fraud. If both spouses are trying to prove 2 different homesteads for tax purposes they would have to be very careful because that could be construed as tax fraud. I think you need to find a new lender who can explain this situation a little better. 

 The lender of a big bank today said that underwriter will need a solid reason such as a divorce, separation, refinance if the wife wants to have her name removed from the second home (that husband purchased as a vacation home) in order to qualify for the third home as her primary residence. Lender recommendation is : DO NOT add wife to second vacation home title and simply have her stay out of the home ownership mess unless she plans to buy the 3rd home as her primary residence. He said that underwriters will reject the loan and its not worth the hassle to now add her name to title and later remove it because refinance costs money and unless you are not separating/divorcing - the other reasons are not acceptable easily.

Thanks but to get a future primary residence lowest interest loan on wife name - the wife would have to be removed from the previous title on which she did not have the loan on her name. This is what the lender told me, as he said that the bank underwriter performs a title search on all parties first before issuing any loans

Originally posted by @Andrew Postell:

@Varun Parkash admittedly, I cannot speak for every lender here.  And it would be pretty time consuming to talk about every loan type for this but most lenders/loans will start questioning secondary homes if you are buying more than 1 per year.  The requirements of the second home according to Fannie Mae are:

• must be occupied by the borrower for some portion of the year
• is restricted to one-unit dwellings
• must be suitable for year-round occupancy
• the borrower must have exclusive control over the property
• must not be rental property or a timeshare arrangement
  • If the lender identifies rental income from the property, the loan is eligible for delivery as a second home as long as the income is not used for qualifying purposes, and all other requirements for second homes are met (including the occupancy requirement above). cannot be subject to any agreements that give a management firm control over the occupancy of the property

Hope that helps!

My question is more around these scenarios:

1. Does it matter to lender (bank) if the new property buyer is a wife who never had a title in her name in the past? It seems from your statement that a lender does NOT care about secondary home purchase if the purchase is NOT every year.

Originally posted by @Andrew Postell:

@Varun Parkash I am very confused by the description here.  If you are buying your primary home, it doesn't matter if your name is on any other properties.  If you owned 100 properties, all with your name on it, and you wanted to move into a new home that you would occupy, then you would qualify for primary residence terms.  Does that make sense?  

If I am missing something from your post please let me know.  Certainly willing to help as much as possible.

 HI Andrew, thanks for the response. I thought that Lender holds us accountable for any property that was previously purchased as "primary residence" and then later "rented out" as a primary residence loan which is only allocated one time.

What are the rules around "vacation home"? How many vacation home could an individual purchase under the loan terms of "Vacation Home" by a bank? My assumption is ONE per person.

Can experts chime in please ?

The scenario is as follows:

Husband - only on initial 2 properties mortgages with bank. Wife currently does not have 2-year work history & not on mortgage.

1. Husband owns 1 property solely and only on his name as his primary residence - rented it out later. Wife signed the quit claim deed and husband is the only one on title.

2. Husband about to close on a 2nd property - vacation home and loan/mortgage is only on his name. Husband wants to keep the title only on his name. Reason: this will keep wife's name out of any public and property records and then later wife can buy 2 homes - 1 primary and 1 vacation home by having her name on mortgage and also including husband funds on mortgage and either have "JUST HER name on title" or have her+ husband name on her next 2 properties.

3. Wife buying a primary home just with her name on the title.

4. Wife buying a vacation home just with her name on title.

Reason for doing this entire effort is to ensure lowest possible interest rates and legally be able to own 4 houses: 2 per spouse. 

Am i missing something or does it matter to banks/lenders in whose name the property has been purchased before to avoid getting an "Investment loan" which is at a considerable high percentage interest rate? All i know is that one person can have two homes at lowest interest rates: primary and vacation home.

Guys, as per new Tax rules, does it make sense for an average joe with 2-3 single family homes for say 850k-2M in total to get an LLC registered and have the homes transferred under them?

https://www.biggerpockets.com/renewsblog/2015/06/0...

THE above is an old article and i am looking for expert opinion

Sorry for such a long post but details are critical

Need some guidance regarding my friends situation. He will loose his deposit and all loan fee paid if he did not get this loan approved = 2K (loan fee non-refundable amount) and 8k home deposit (if he could not get loan from any other lender due to this issue)

1. John bought a property in 2016 as a primary residence and lived in it for 5-6 months and then had to rent it out due to job change. 

2. He is using the same lender now to buy a second home. He disclosed the same info about #1 to the same lender through which he is securing his second home loan - vacation home . His CPA when filing his 2016 returns did a mistake by not including the stuff on Schedule E such as  "type of property" , property address, fair rental vs personal use days and simply entered Property as OTHER and declared some other nominal expenses and HOA fee etc.

3. Underwriter now comes back with questions regarding why the items listed in #2 above (property type,address,fair rental etc.) in bold were not listed while filing taxes? Underwriter asks - why is mortgage interest rate appearing on Schedule A? Why is all this info missing from federal tax return?

4. Mortgage guy calls John and says : WE NEED Signed and dated letter from CPA addressing the questions about Schedule E and items listed under #2 and #3 above in bold?

5. John calls CPA and CPA refuses to provide any letter saying lenders are crazy these days and she cannot risk her license being revoked and cannot provide any letters. What she does is : Writes an email saying: John, you have an old copy and attached is final one as our software did not pick up info. 

6. John forwards that attachment and email to mortgage guy and also writes (CPA advised John to write this email) that: Since i lived in the  Property for approx. 6 months, the mortgage is shown as itemized deduction rather than bifurcating into two - as 1098 mortgage interest statement is only 1 for IRS purpose. 

7. Mortgage guy after a week comes back and says: 

Would you be able to email me the final, corrected copy of the 2016 Federal Income Tax return? We received the email reply from your CPA last week stating he emailed you the final copy (it looks like the CPA added some of the missing information on the old copy). I can then submit the updated return and the CPA’s email explanation to the underwriter for review.

NOW in this scenario- what should john do? Problem is the updated copy provided by CPA has $2500 extra listed under rental income section - it includes now the property address, type and fair vs rental days, but due to the additional $2500 being mentioned as rental income - this has screwed up the total income of John. 

John signed 4506-T with bank last month and its clearly visible there that the new copy provided by CPA does not match with what was filed with IRS - the $2500 difference is obvious as it also impacts the federal tax returns received by $450 and state returns by $150 meaning (as per original tax returns filed by CPA - john received $450 more federal and $150 more state tax returns).

The rental income on IRS tax transcript of 2016 clearly shows the $2500 difference. CPA just added this money now in the edited version of return and made John send it to the mortgage guy.

1. What option does john have now - stick with whatever copy CPA provided and say it is the final one that was submitted to IRS and mention the same to underwriter?

2. When underwriter comes back and says - sorry, your returns do not match with what was filed as per 4506-T? Explain?

3. CPA has denied giving any letter of explanation as of why she originally missed filing info about rental stuff on schedule E. CPA says i cannot risk my license for the $500 fee you pay me to file your taxes - very rude and unprofessional

4. AS FAR AS THE RULES are concerned: Lender legally cannot ask or force john to apply for amending his returns with IRS.

5. John has explained the same rental income discrepancy issue to CPA - but CPA is not helping and not interested at all.

how does JOHN get this loan approved from this lender? Is a $2500 difference such a big deal in the eyes of lender? Because of Cpa's stupidity - john is stuck.

Originally posted by @Matt H.:

The rich get richer. They get better rates. That’s just a fact. But 2’s are mostly gone in 2018. Time matters. Especially since the fall. I was offered a 3/1 at 2.60% in June of 2017. They told me same loan was 3.60% yesterday.

Oh i hear you, i spoke with my banker - he said 4.375 on today's current rate of 10/1 ARM, so i felt ok that i managed to sneak in a 3.875 30yr fixed by paying $1300 fee a month ago.

Hello,

I am closing in on an SFR in summers and want to check if anyone is offering 2.8 Interest Rate on a 10/1 ARM loan in Georgia State.

Purchase Price: 315K - Brand New Property

Down: 20%

Loan Amount: 248K

FICO: 800+

Debt to Income Ratio: close to the max limit

One on-going loan - rental income reported on Tax Returns

Are there any penalties if this residence is sold before 10 years?