All Forum Posts by: Zach Wain

I am not sure about lending in Canada, but the same basics should apply.  First, get a referral if possible.  Ask your realtor, financial advisor, etc.  They should prescreen all of their referral partners.  Look online for reviews.  And, have a conversation and see how it goes.  Then talk to 1-2 other mortgage people and see who is the clear winner.  Usually, you can tell when you are talking to a pro.

Can you rent it for 3-12 months then try again?

@Pranay Verma - Defintely consult a CPA for your tax question, but I have seen people write off the portion of the home that they rent on their schedule E (that is where rental properties go).  If you rent out 2/3 of your home, than the CPA might write off 2/3 of your mortgage interest, prop taxes, repairs, etc on your schedule E.

Evan - 10% down to answer your question. But, the main reason to go FHA would be if you are buying a 2-4 unit home. That is where FHA shines. The majorty of the time, a conventional loan will offer a much better deal. Conventional loans have as little as 3% down. Depending on your credit scores, the PMI can be drastically cheaper, the PMI will one day get automatically removed, and there is no up front PMI like FHA has.

Every scenario is different, but conventional out shines FHA.

Will - The CA property tax system is a mess the first 1 yr of home ownership.  That is great they are paying them for you, but be prepared to get an escrow re analysis in the coming months from your lender as they may need to collect some more money to get their escrow account back on track.  After the first year juggling act is over and your taxes are reassessed, it will be much more dialed in.

@Travis Provin - In 6 months time interest rates will likely be a little bit lower than today, so the math will all change.  I would not worry about the finer details of comparing loan products until you are a little closer.  Also, depending on what rate you eventually get, there is a good chance you will refinance in the first 1-2 years after you buy because it is fairly likely we see a falling interest rate environment in 2023-2024.  Point being, you are not married to your loan.  Marry the home, date the rate/program!

@Sam Burnoski - I am not licensed there, but I know a great Mortgage Broker that is and can help.  

Too risky IMO.  Being diversified means having a good mix of asset classes.  Taking a major portion of your equity position out to by real estate sounds too risky.  If you time it well, sure its great.  What happens if it you time it poorly?  You set yourself back big time!

Save money to buy a home, and if its too hard to save 15%-25% down for a rental home.  Buy a new primary home and rent out your old primary home.  3.5%-5% down each time and you can do this once per year.  Buy a new primary, build that way.  Less risk! 

Are you planning on putting 20% or 25% down on the purchase?  Have you compared the numbers yet?  That will impact your cash flow calc.  Good news is that mortgage rates have been coming down for a few weeks now and will hopefully continue that trend.

@Zach Stiegler - correct! As other said, if you want a duplex go FHA. FHA is amazing when comparing 2-4 unit primary homes vs conventional. Yes, FHA has higher PMI (and up PMI), but conventional requires more downpayment and conventional rates are about 0.25% higher for multi unit homes. FHA is the way to go for multifamily primary homes.

FHA (with some lenders) also allows 2-1 temporary buydowns which are a great tool to keep in mind during these higher interest rate environments...