All Forum Posts by: Bob Rowe

Sounds to me like you are "self-employed" and your job is a "property manager". The DTI guidelines would be hard to meet if there is no assurance that any income would be consistent into the future. Are rent checks written directly to you? I would check with a local bank/credit union that you have a relationship with. They will be more flexible.

Good luck.  

I was under the impression from some research that I did a while ago that there were more restrictions on the self directed IRA usage. As in you can not personally benefit from the use of those funds. Your retirement plan can, but not you (under 59 years old). No salary, no personal benefit like it sounds you are getting. I am not a CPA, but did you come to a different conclusion. Thanks and sounds like a great business!

@Jason Little ... The lender has likely already verified your employment in several ways.  

1) The pay stubs you provided.  
2) A VOE to your HR Dept or Office Mgr (this would be written).

If you are at docs, those verifications were adequate (and likely within the last several weeks).   This last check is to ensure that everything is still as verified a few weeks ago (a lot can change in a few weeks).

They can lookup your company online and ask for HR, etc...  to get to the right person.    These funding departments do this all day for each of the loans they fund...  So, it just another "task" for them.

For a SFR, the minimum is 20%... I am sure you can research a few other options to get you to your goal of the 80% LTV. However, the rate will be affected. The higher the LTV, the higher the risk = higher the interest rate. If you cannot find a single source, some lenders may give you a HELOC behind the 75% 1st to get you to where you need to be.

Good luck!

Yes.

Most of the time they will call your employer and execute a VVOE (Verbal Verification of Employment) just before funding.   This is to ensure/confirm that you (and all applicants) are still employed per what is listed on the application.

If the VVOE differs, they can hold up the funding.   Reasons:  You quit, you are fired, etc...  If you have a new job in a similar line of work, then you can provide that information to the underwriters to get you to the finish line.

Its one additional layer of protection for the lender (who have been burned on this very issue in the past).

Hope this helps!

@Michael Cohen ... Your comment of "snake oil" goes to my point of working with someone you trust.   If you have done your homework and due diligence, the LO should be a person you trust that would not be peddling you a crappy loan, program or rate.

In our local market, once a purchase is in escrow the sellers agents have already contacted and verified the "pre-approval" with the chosen LO/lender.   If the buyer/borrower, start shopping a loan at that time, it delays the process and erodes confidence of the seller that the original pre-qual was either garbage or invalid.    The process is already stressful enough.

A borrower is free to choose whom they work with and what lender they proceed with.   With my clients,  I try and add value and build trust.   You have to deliver.  Losing one loan is bad enough, but that clients stream of referrals into the future can make snake oil a very costly mistake.

@Cheryl Stevens .... If you plan on living in the Florida property as your second home, then that would be a good option as well.   Properties can fall in 1 of 3 categories:   

- Primary (you can have one)

- Second Home (you can have more than one)

- Rental/Investment (you can have many).

Second Home underwriting guidelines/rates are very similar to Primary Home, so not a bad option.   However, underwriters know that some will attempt to slip an "investment" property thru the system and have it underwritten as a "second home".   Knowing this, they will scrutinize the file a little more to ensure the home can be categorized as "second home".    Its a risk issue for the lender => Investment properties foreclose at a higher rate than primary/second homes.   (i.e. when you have financial trouble, the average borrower walks away from the investment home prior to the place they live).

@Tim Johnson  ---   The overwhelming response from regulators, consumer protection agencies, etc... is harmful to unwitting consumers.    These are sophisticated loans that unless fully understood can be very harmful individually.

@Tim Johnson - Its highly unlikely that you will ever see these resurrected from the "bad lending" idea grave yard...

@Cheryl Stevens  I would advise against the Home Equity Loan (HELOC)... It is essentially a variable rate. With Fed increasing rates, that payment will rise with it.

The good news is you have several options.   The option that gives you the best rate is the obvious choice ->  Your primary residence.    Find a lender who can do a 250K Cash Out refi of your primary...  Terms and Rate should be much better than your other properties.

You could even add a small HELOC (50K) to the transaction to give you some flexibility/liquidity with your purchase price.

Good luck!