All Forum Posts by: Brittany Minocchi

Quote from @Michael Dumler:

@Bailey Coleman, I'm sure some lender will correct me on this, however, I believe Fannie and Freddie have a six-month seasoning period for delayed financing. If this is true, then a non-QM loan product such as a DSCR loan could be a viable option for a cash-out refi. This option will still take a couple of weeks to process allowing for proper underwriting and appraisal.

Delayed financing and a cash out refi are a bit different….delayed financing is done before 6 months and without an existing mortgage, cash out on a financed property is (well, was) 6 months seasoning. They just increased the seasoning period from 6 to 12 months conventionally. Gotta watch those minimum loan amounts as well. In this instance, a local bank or credit union is probably the best bet. Some DSCR lenders have a $75k minimum, although most are $100k. 

Hey Seth -

Up to 75% is probably more realistic, but guidelines change all the time on DSCRs. Happy to connect if you’d like, rates will depend heavily on FICO. 

Quote from @Emilio Mejia:

My credit is at a 549, from 750 a few months ago

Most DSCR lenders require at least a 620. I have one that will go down to 575 in some cases, but you're gonna feel it on the rate and LTV. With the borrower's credit being one of the few qualifying factors, DSCRs with less than a 700 are rough.

I'll third what Kristen and Jack said - $75k is the lowest any of my lenders will go on a DSCR. I'm always on the lookout for lenders that go lower, but haven't come across any yet. I'm local to the area and have had quite a few people in the same situation as you.

Although you're reducing your mortgage payment by living in one of the units, if you're only collecting $2,200 in rent once you're moved out, it doesn't sound like you'll be cash flowing (assuming at least average credit and minimum down payment). Around $1800 would go to just P&I without factoring in taxes and insurance. I can probably guess the area it's in based on your comment that it's a great area, and if I'm right, I'm willing to bet the taxes aren't cheap. That makes me think you'll have to raise rent a considerable amount to make it make sense. 

Another vote for the HELOC - I wouldn't give that rate up to refinance.

Why are you set on purchasing future properties in cash instead of leveraging OPM? Wouldn't it be better to spread your funds out over multiple properties instead of putting all of your eggs in one basket? 

When you say the property will be under both of your names, just to clarify, are you referring to the mortgage, the title, or both? 

Hello @Sung Won Moon!

Typically on Zillow, the address listed will be for all of the units (something like 1224-1226 Main St. for a duplex, for example). Or, it could just be one individual address if it is an up-and-down duplex and not a side-by-side. If a duplex is for sale, you are purchasing the whole property, not just one unit, so you wouldn't see a separate listing for each unit.

As far as finding deals, Zillow, Facebook and Redfin are good places to check. County auctions could be another good resource, but those can be a little more tricky (back taxes are pretty common, in my area anyway). If your area has a real estate investing group of some kind, you may make some valuable connections there. 

Hopefully that helps! PS - no stupid questions, we all start somewhere :) 

Hi Kathy! I agree with Stephanie - chances of finding a local credit union or bank that offers nonQM loans are probably slim. There are even brokerages out there who don't do nonQM loans (DSCR fall under this category). As you may already know, these loans are done based on whether or not the property qualifies, and it's not all about the buyer like with traditional loans. Income and employment history are not factors. Like Stephanie mentioned, 20-25% is the norm these days. It was once possible to find them for 10-15% down, but not anymore. Expect a prepayment penalty and higher rates and/or than traditional loans. Most lenders require a FICO of 620-640+. These requirements change all the time. There are lenders that will do loans on properties with a DSCR less than 1.25. The better the DSCR, the better the terms in most cases. Not sure if you're looking at financing a property used as a short term or long term rental, but be aware many lenders use the market value of the property when rented out on a long term basis. This makes it difficult to meet the DSCR requirements at times. Happy to connect if you'd like to discuss further.