All Forum Posts by: Zach Wain

Hi Ana,

Local vs non local will not impact rates or pricing.  Each mortgage company from big to small sets their own profitability models and their rates are based off that.  I have the same rates for TX as as I offer in AZ, CA, etc.  Guidelines are the same as well.

What is 10x more important IMO, is to find a mortgage officer that you can partner with for the future.  Find someone with competitive pricing, but also market knowledge, experience, speed, customer service, and any other criteria you find important.

Hi Sam,

I can not find a Fannie Mae/Freddie Mac guideline on this, because its not a standard home ownership/financing structure. It may come down to underwriter discretion. But, if they find you on title they will at a min count Property taxes/HOA/and home insurance against you. If they see on your bank statements a payment being made every month to a mortgage company, they will ask what it is and then count it against you. Can you count rents to offset it, great question? Is there a lease with your name on it, or the previous owner? I think its underwriter discretion, 50/50 on counting rents.

@Brandon Nguyen - Welcome home and thank you for your service!

I would need more details to answer your question. If the property was not listed on your 2022 tax return as a rental, VA will allow you to use a lease to offset the mortgage payment (or reduce the monthly liability). If it was on your schedule E in 2022 than it depends. Was it rented for all 12 months or only part of the year? Some lenders are not great about digging into the details of that part of the rental income analysis.

How much VA entitlement is used up? That could be a limiting factor and we would run that as well.

VA will allow a very high debt to income ratio on certain files, but we have a "residual income" calculation that still need to work.

So - it depends on the details...  I am happy to chat if you have questions and want to really dig into the scenario

@Ray Winner - The term is "delayed financing" and most lenders can handle this type of refinance transaction.

I think you have 2 opposing goals - spending money to remodel your home and also increase the value so much that you can get cash out.  It is unlikely that you will increase the value of your home dollar for dollar compared to the remodel.  Adding sq ft is the best way as someone else mentioned.  But doing a kitchen remodel, carpets, ceiling, etc will not get you a dollar for dollar value increase.

Its worth it to make your home more enjoyable, but it will not make you money

I have not seen any, I highly doubt they exist right now. DSCR as Darnell mentioned is probably the best option. There are bank statement loans and other products besides a conventional mortgage.

@Nimit Gupta - you may want to consider buying a primary home with the min downpayment allowed (whether FHA works for you at 3.5% down, or conventional at 3% down) and live in the home for 1 year. Then, rent that property out and buy a new primary home with 3.5%-5% downpayment. Live in that home for 1 year, rinse and repeat.

That is the cheapest way to finance rental properties, buy them as a primary home and after you have met your occupancy requirements of 1 year rent the property out and buy a new primary.

Let me know if you questions on that structure

I agree, find a new lender. HELOC's are a little weird, in that each lender can make up their own guidelines. Nothing is standarized. Usually, if you have new rental properties that are not on tax returns you can show a copy of your lease and we can use 75% of gross rents. Find someone new!

For that size, I agree 0.5%-1%.  I would charge 0.5% in yield spread and keep the up front costs to nothing.  Nice and easy.

Lenders are slowing figuring out how to count STR rents on DSCR loans. Many lenders will require 25% down and since Non QM loans guidelines vary from lender to lender expect from variance in lender guidelines, but we have a DSCR option that counts 80% of expected STR rents.

What has really become popular pricing wise the past few months is Bank Statement loans. If you own a business and you have large monthly business deposits, the rates/pricing on bank statement loans is WAY BETTER than DSCR and its an easy loan process.