Is an 8.5% Non-Qualified mortgage too high?

[Daniel Porter]

Hi y’all. I’m trying to buy my first home in south Dallas. This will be for a house hack and to start building equity every month. I’m not a traditional earner, I’m a self-employed musician, and in order for me to get a conventional mortgage, I’d have to pay about 40% in taxes each year. And then wait another two years until I could qualify, which puts me just shy of 30y old.

So I went the non-qualified route. I’m currently approved for a loan, but the problem is that it’s 8.5%. Now, I get I can refi our later on, but part of me thinks I’m going to have just as hard of a time trying to refi out later on.

So here’s the rest of the deal.

I’m currently spending $525~/mo in rent and utilities in south Dallas.

I’m looking to buy a home around $125k, with 20% down, and house hack it.

There is a 3/2 house that I could rent two rooms for about $800 total. My PITI would come to about $800 though, and of course, op ex/cap ex would be coming out of pocket. The house is recently renovated, and shouldn't be having any major issues for a while at least.

Is that better in the long run? Or should I try to qualify for a better loan? Or do a BRRR on a different house and try to then refi into the 8.5% loan I'm qualified for? I'm feeling myself starting to get analysis paralysis here, and definitely am afraid of getting hosed, and i don't really have any experience investors to talk to.Any advice would be much appreciated!

-dan

[Jay Hinrichs]

as long as the numbers still work.  interest rate while important is not the driving factor..