All Forum Posts by: Valerie Pedigo

Great job!! I agree, can we see the numbers?

If it isn't currently rented, we just count the expenses for the property.

Yes, I have several customers that finance 2 at a time. As long as they qualify for both, there is no problem.

As far as the paying cash now for the 60K and then pulling it out later vs. doing a purchase money mortgage is concerned; do the purchase money.

Anti-flipping doesn't apply at all - you are just doing a rate/term refi of a hard money loan. As I said before it is probably just an investor requirement and you will be fine. If I were doing your refinance, you would have to have 2 appraisals.

Investment property loans are not easy for us as lenders and they are not easy for you as the borrower. More documents, more time, more collateral review, more everything! I agree with Scott about finding someone investor friendly. If they don't close a lot of investment property loans, they are not going to have a good handle on timing and guidelines.

Good luck and hopefully you close soon!

If the first appraisal was for the HML, the permanent lender cannot use it. Appraisals are not portable in Conventional financing, so to the bank you only have one.

Quite possibly the investor that would be purchasing your loan is asking for a second appraisal because of an increase in value since purchase.

I have to have 2 appraisals for all investment properties worth under 100K. For investments worth over 100K, I have to have 1 appraisal and 1 field review. These overlays to the Fannie guidelines are introduced by the investors to mitigate against risk. Every lender has to structure the guidelines so that the loans can be sold. In Jon's example, his lender requires 6 months title seasoning whereas I do not. I can refinance a HML the day after it closes.

I would ask the loan officer why they need the second appraisal. Loan officers do not make any money off of appraisals, so either his guidelines have changed since you started the process, he made a mistake, or he needed two from the beginning and didn't tell you upfront.

If you don't mind, post the explanation here and we can see whether it is valid or not.

Exactly...it just depends on why they are asking for reserves. If they want to see you have all cash, then the retirement money won't do. If they want to make sure you qualify for permanent financing - it counts.

The biggest thing is communcation. If they look at your deal (are happy with the numbers,) but have a little hesitation, ask them what else you can do to show them you are a good candidate besides pulling your retirement.

Can you cross-collateralize your other rental? If you have conventional financing on that, you probably have equity. Ask them if they will use the equity in that property to strengthen your deal.

You can go to a banker and get prequalified for a refinance to show you can get end financing.

Just throwing out ideas here...

Hard money is a great tool to get into a property, especially when rehab is needed.

As Jon said, if you use conventional financing to purchase, the value will be the purchase price.

But, if you use hard money to purchase (get 70% of ARV -usually less) and then do a no seasoning rate/term refinance - we can lend 75% of the appraised value.

I do several with that same exact scenario each month. HMLs want to know that you have reserves so you can do this.

Reserves are very important for their exit strategy (and obviously hedge against risk.) Most likely, they want to make sure you can qualify for a conventional loan. If your credit is good and DTI is good, but you don't have enough money in the bank to get financing...they will have to hold the note longer than anticipated or foreclose.

Remember that reserves can be whole life insurance policies, 60% of your 401K vested balance, CDs, stocks, bonds, mutual funds (not just checking and savings.)

Good luck!

Welcome Jim! - from right across the border in Chautauqua County, NY :) Would like to hear more about your development business, as I sell panelized homes/commercial buildings. Congrats on your success and hope to see you post often!

The only thing I can think of is that it may take the lender 8 days to get commitment. I don't know of any law that states the lender must keep the documents for 8 days prior to processing?

There is the RESPA rule like JCC stated - once the file is marked application received, the disclosures must be sent to the borrower within 3 days. Then if there are any changes to APR, the Truth in Lending statement must be re-disclosed and there is a 3 days waiting period for that (this would be at the end of the process, though.)

Definitely contact a supervisor if they are still working with that company.