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Updated over 4 years ago,
Conventional 97 Loan
Hello All,
I am purchasing my first residential property (have an investment property out of state). My partner and I are unmarried with plans of marrying once it is more advantageous. We will need to apply for the mortgage together to have the buying power for the house we have found. We are currently under contract for a 435k place in a great area with strong resale ability and rent potential once we leave there in 5+ years.
The first mortgage company that we pre approved with gave us the 450k limit we aimed for and also said there was room to go much higher (even though we are unable to go any higher) and they gave us very high total closing cost estimate of ~18k not including down payment, so we decided we would shop around. They also included my investment property on the loan disclosures and GFE, so they were well aware.
The second one we applied with told us that since i have owned a home in the past 3 years that the 97 conventional with 3% down is not available for us, even if the investment property is owned under an LLC, which it is. And also that they would not loan when a property is held under an LLC. Our only option with them was to bump up to 5% down to get a loan. So, my first question: Is it just this lenders policy that they will not do the conventional 97 and some lenders would be willing even with my investment property? second: Does it matter if the Deed to my investment property is in an LLC when i answer the "have YOU owned a home in the past 3 years?" question on applications? Third: Do you guys know any lenders that are friendly to a similar scenario as this and would recommend? Fourth: Are there any creative solutions to this problem that i am overlooking? (the 5% down vs 3% down is about a 8.5k jump and we would love to save that cash so that we are not dead broke once we take over the house) We have about 35k of cash ready to use.
Answers to any of the questions are appreciated even if you are unable to answer them all. Thanks BP Community!