All Forum Posts by: Darrell Cropper

@Philip Johnson. I often see co-borrowers on mortgages. Their income would have to be sufficient to cover their debts and your debts if going Fannie Mae or Freddie mac.

I would recommend getting another job ASAP. Many loans that allow for new employment if there is not a significant job gap.

I would really hesitate just transferring ownership of a property unless they actually "purchase" it.

@Zayne Ruth

My first rental property was from converting our primary residence to a rental. It has been a big success. We have had a property manager take care of the property locally. I have been wondering if out of state is best for the next move. My analysis of properties in Utah from the MLS hasn't shown acceptable cash on cash return. I think out of state investing for the first deal is reasonable if sufficient research, networking, and due diligence is done in order to manage risk.

single family you are okay with 20%.  Typically you will need 25% down for a 2-4 unit property.  We got our rental by converting our first home.  This way, you can get into it with less down.

Typically an appraiser has to define the boundaries of the subject properties market. If there are not similar, recent comparable sales in that market area then the appraiser would expand the search and provide comments.  Often times an appraiser does have to expand their search on 2-4 unit properties if there just aren't many close by or not much turnover.

Some lenders may require the comparable a to be within 1mile, but many lenders would be okay if the appraiser has properly documented how the comps support the value they have indicated.

I agree that the time horizon is a big part of the decision.  I would use an amortization calculator to determine the amount of interest and fees based on the different rate options.  This can be analyzed at different points in the loan for potential time horizons.  Volume of interest is more important to me than rate.

To add a little more to the previous comments, fha has an upfront mortgage insurance fee and an annual mortgage insurance that is charged with your monthly mortgage paymemt.  These funds go towards insuring loans that don't perform.

There had been a proposed rate reduction on the amount of annual mortgage insurance that was set to take effect on January 27th. This would have saved money for those getting new fha financing that closes after that date. This was suspended indefinitely.

So, the rates just won't go down at this time.

My experience as a mortgage underwriter is that the back to work program is really hard to document.  Likewise, extenuating circumstance is difficult to document.  It does require a hardship that meets specific requirements as referred to in a previous response.

Otherwise the standard 3 years for fha and 4 years for conventional must pass to purchase through one of these avenues. 

As an underwriter for conventional and fha loans, my experience is that different lenders will treat the dti differently. It is true that some will qualify at 1% of the credit line on a heloc.  

If the credit report shows $0 balance on a heloc that is not being used then I would not include it in the dti.

  Some lenders will ask for evidence from the heloc lender what the payment would be based on the anticipated amount drawn for the transaction or just calculate it from the note.  

Bottom line here is ask around on how the credit union/bank/lender treats it.

Homeready does allow for 2-4 units as long as the occupancy is primary residence.  So, this is a great option.  Here is a link to a product matrix for homeready:

https://www.fanniemae.com/content/fact_sheet/homer...

The main thing with more than 1 unit under this program is a limited LTV. SFR's can go up to 97% LTV. 2 units are limited to 85% and 3-4 units limited to 75% LTV.

There are income limits for homeready.  Be sure when you have the property address to see if you fit under the income limit.

https://homeready-eligibility.fanniemae.com/homeready/

As a mortgage underwriter, I am surprised more people don't buy a multi unit through FHA for their first home purchase