All Forum Posts by: Brittany Minocchi

If your goal is less required documentation, DSCR is likely your best bet as most everyone as mentioned, possibly a bank statement program depending on your job structure. These loans don't require employment history, income, tax returns or DTI. Much more streamlined compared to traditional financing! Happy to chat further if you'd like to connect.

I wouldn't automatically assume DSCR rates will be significantly higher than traditional financing - that's not always the case. They do tend to be slightly higher, but that doesn't mean your deal won't work. It depends on the rental income, what you plan on putting down (20-25% is typical, 15% or 25% is required for conventional depending on # of units) For your owner occupied deal, you should be able to use a portion of the rental income to qualify and help offset your DTI a bit. Not all lenders are well-versed in these calculations. If you have any debts you can wipe out, that should help as well. 

Happy to chat if you'd like to connect!

What's up Angel! Nothing wrong with being a bit new - there are options out there for all stages of the game. 

When you say your house hack phase has passed, are you saying you DON'T plan to occupy a unit of the 4-plex? It'll strictly be non-owner occupied? Lending options will look different depending on your answer. As far as pulling equity from your duplex - totally doable! You've got 3 options: 

1. Cash Out Refinance

This will allow you to pull a portion of your equity and will replace your current mortgage (assuming there is one). If it's free and clear, that's OK too. If you ARE occupying, you'll need to be able to qualify using your income, employment history and DTI. If you aren't, there are other options that don't require those. Instead, the income (or potential income) of the property would be used for qualification. FICO is a factor in both scenarios. This option will have the lowest interest rate.

2. HELOC

This takes either first or second position (depends on whether you have a mortgage) and is a variable rate line of credit. Interest rate will fluctuate. Typically, you'll have something like a 10 year draw period with interest-only payments, and then the balance is amortized over 20 years. Most HELOCs will require that the property is titled to you, not an entity (like an LLC) and require using your income, employment history and DTI to qualify.

3. HELOAN

This takes second position and is a closed end loan, meaning it's given as a lump sum similarly to a "regular" mortgage. Qualification can be either of the methods I mentioned with option #1. 

Hopefully that helps! Happy to chat if you have any questions :)

Hey Joshua - 

I think I'd be able to help with this. Can you reach out with more info so I can dig into it a bit? Address, how long you've held title, estimated value(s), etc. 

Hope to hear from you soon! 

You should "intend" to occupy a property for a year with FHA, which it sounds like you'd be doing by the time it were to close. If you're refinancing to a business purpose loan that's totally fine, but chances are good you'll need a lease in place for the unit you were occupying so the lender feels confident that it's strictly going to be used as an investment property. Now if you didn't refinance rented that unit out before living in it for a year and changed your insurance policy to a commercial one, that could be problematic (just to give an example).

Hi Dalton! 

Not sure when you purchased the property, but keep in mind conventional loans require 12 months of seasoning before you can use the appraised value for a cash out refi. Assuming you've met that, your original loan amount was ~$364,500 with 10% and a purchase price of $405k. If you cash out at the 80% LTV conventional max (assuming it's a single unit) and your new value is $575k, that makes your new loan amount $460k. That's enough to pay off the original loan and pull the $85k you had in rehab costs, with a little left over to cover your closing costs for the refi.

Do you have an immediate need for the ~$85k you'd be pulling? What is your current rate? How long do you plan to continue living in that property? There are a lot of variables....I will say I don't usually advise to wait for rates to come down. There's no guarantee that they will, and there's a cost to waiting. 

What's up Maria!

I'm in Ohio, happy to chat if there's anything I can help with (including restaurant recommendations if you happen to find yourself in the Akron/Canton area)! 

Check out Ohio! We have a reasonable cost of living and properties are significantly less than CA. A $100-$200k down payment would get you a decent multifamily property, possibly with land depending on where you look.