All Forum Posts by: Brick Biermann

That's a good point, Jersey City is fairly big city and would likely be more concerned with the "bigger fish". Even at market rates I believe my location and amenities are still very competitive and would be surprised if they could find a better deal. Appreciate the advice.

I have a 4 unit property located in Jersey City Heights, NJ with all units currently occupied and 3 of them renting under market rate. All 3 units have their lease expiring later this year. 

As I understand it, Jersey City has an ordinance for non-owner occupied properties with less than 5 units cannot increase the rent to an "unconscionable" level. My question is, would raising the rents to market rate be considered "unconscionable" even if those increases could be over 10-15% in some of cases?

UPDATE:  Turns out that there was a clause in one of the refi mortgage documents that I signed when I refinanced my current home which stipulated I would need to occupy my residence for at least 1 year after closing as my Primary residence. Because of this Better.com could not honor the locked rate originally quoted and would only offer me Investment property rates eventhough I would be using the 2nd property as my Primary. 

I ended up going with another lender who verified with their underwriting that they would overlook this stipulation but unfortunately with rates rapidly rising, the lost week cost me half a % in increased interest, bummer 😒. 

Thanks all for your advice/commentary. 

Hello All,

I recently completed a refi/cash-out on my multi-unit (4 units) property which I also use as my primary residence [been living in one of the units for several yrs]. At one point during the process of the refinancing the mortgage servicer (Better.com) asked if I would use the cash out funds to purchase another property which I replied "No" to because my plan was to use the funds for future upgrades to the property. Ultimately I closed on the refi/cash-out and secured a great low rate.

Now it's been about 2 months later and I decided it might be best [because rates are still relatively low though rapidly on the rise] to move out of my unit, rent it out, purchase a single family and use a portion of the cash out funds as a down payment. So I applied through my savings bank (Ally) for a new mortgage and as luck would have it they partner with Better.com to service their mortgages. Not surprisingly their underwriting team has now asked to explain why I answered "No" on whether I would use the cash out funds from my current residence to purchase another property which is exactly what I'm doing now.

My response was basically, "I changed my mind". I explained because rates are starting to go up and since I managed to take out a good amount of cash I thought it might best to lock in another good rate, use a portion [50%] of the cash out as a down payment to purchase a single family and still have enough left over to do the upgrades I had planned for the refinanced property.

My questions are:

1. Can any of these actions be viewed as potential fraud taking place?

2. Is there any way I can prove to Better.com that I fully intend to use the single family property as a primary residence and not an investment so they don't think I'm just trying to secure a favorable rate?

3. Are there certain qualifications that need to be met to convert a current primary residence to an investment property when purchasing a new primary residence?

Appreciate any advice.

Hello All,

I recently completed a refi/cash-out on my multi-unit (4 units) property which I also use as my primary residence [been living in one of the units for several yrs]. At one point during the process of the refinancing the mortgage servicer (Better.com) asked if I would use the cash out funds to purchase another property which I replied "No" to because my plan was to use the funds for future upgrades to the property. Ultimately I closed on the refi/cash-out and secured a great low rate. 

Now it's been about 2 months later and I decided it might be best [because rates are still relatively low though rapidly on the rise] to move out of my unit, rent it out, purchase a single family and use a portion of the cash out funds as a down payment. So I applied through my savings bank (Ally) for a new mortgage and as luck would have it they partner with Better.com to service their mortgages. Not surprisingly their underwriting team has now asked to explain why I answered "No" on whether I would use the cash out funds from my current residence to purchase another property which is exactly what I'm doing now. 

My response was basically, "I changed my mind". I explained because rates are starting to go up and since I managed to take out a good amount of cash I thought it might best to lock in another good rate, use a portion [50%] of the cash out as a down payment to purchase a single family and still have enough left over to do the upgrades I had planned for the refinanced property.

My questions are:

1. Can any of these actions be viewed as potential fraud taking place?

2. Is there any way I can prove to Better.com that I fully intend to use the single family property as a primary residence and not an investment so they don't think I'm just trying to secure a favorable rate?

3. Are there certain qualifications that need to be met to convert a current primary residence to an investment property when purchasing a new primary residence? 

Appreciate any advice.

Thanks for your reply Mr. Patel. Just so I'm clear on the matter, could the 10% down option be available for both conventional and FHA loans? I'm sure it's available for FHA but would the fact that it's 10% down instead of the allowable 3.5% eliminate the rule of paying MIP for the life of the loan?

Hello All,

So I purchased a 4 family home several years ago for $455K with my girlfriend with an FHA loan, only putting 3.5% down and have rehabbed it to the point where 3 units are rented out while we live in the 4th unit. The rental income from the 3 units alone completely covers the cost of the mortgage so if we were to rent out the unit we reside in, I estimate we'd have a surplus of $1400 a month accounting for an avg. of $500 put aside for monthly maintenance expenses.

I haven't appraised my home since the purchase but based on recent comps, and the # of years I've had the existing mortgage I'd estimate to have approx. 50K in equity.

My girlfriend and I would now like to purchase a single family home. We both have descent credit scores (above 750 Fico), nominal amount of debt, have a combined income of $125K (I earn 80K, she earns 45K) and would like to get some feedback to determine the best approach when applying for a second mortgage. Ideally I'd like to have 20% down for the 2nd home but would also like to know if there are other options available with putting less down. Any advice is appreciated.