All Forum Posts by: David Ingram

@David Ingram that's not required by all lenders (in fact, I've never had a lender ask for this), but it might be required of some lenders...and it's possible more lenders are requiring it these days, since many are tightening their underwriting requirements. ..whether or not lenders require it may also depend on the borrower's overall financial picture and DTI (I'd suggest asking your mortgage broker whether they require this of all borrowers, or just in certain circumstances).

Also keep in mind that not all lenders/mortgage brokers are the same--if you go around to multiple mortgage brokers, they may give you different qualification amounts, different terms, different underwriting requirements, etc. --so it's worth shopping around.

Lastly, an overall suggestion--whenever a mortgage broker tells you something like this, it's always worth asking them follow-up questions like "is this a universal requirement?" "is there anything I could do to get different terms?", etc, etc.....most mortgage brokers are happy to explain these issues to you, and help you understand why you're being quoted certain terms--and what you could do to get different terms...I've had many long conversations with my mortgage broker about these types of issues, and I always walk away with a better understanding of my own financial picture, how the banks operate, what I need to do financially to qualify for what I need, etc., etc. --it's free (and valuable) education.

Good luck out there!

Hi, thank you for this helpful insight. I have some work to do for sure!

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Columbus, Ohio

Quote from @Theresa Harris:

What are you going to use for a down payment? 6 months of mortgage payments will be less than what you need for a down payment.

I’m still working on that. Thanks for the info.

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Columbus, Ohio

Quote from @Eliott Elias:

It is not a universal requirement, just a recommendation to make you look as appealing as possible.

Gotcha!

0 Votes

Columbus, Ohio

Hello, I am also in Columbus. I am here to learn and hopefully start my RE investing soon.

1 Vote

Columbus, Ohio

Quote from @Nathan A.:

Whether or not it's a lender requirement, you do need reserves sufficient to cover vacancy and repairs or capital expenditures on a property.

Makes sense thx. Just trying to figure out this get financed with “no or low money down” montra all over BP and in the books. That goes out the window if I don’t have 6 months of reserves just to get financed right. So confused

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Columbus, Ohio

Hi all! I have listened to BP Podcasts, read about 4 books from Brandon Turner and I'm getting my ducks in a row before I pull the trigger and finance my first long term rental. Talking with a lender I may want to go with he advised me that for a conventional loan, or any loan for that matter that it would be a good idea for the underwriters to see that I have 6 months worth of mortgage payments saved up in-order to be approved for a loan. It doesn't have to be liquid, it can be IRA, 401K etc and that will work. I am W-2 and I pay full mortgage for my regular live in house. There is NO way I could have 6 months' worth of mortgage saved up to finance another house.

FIrst, is this true what I am being told?

Is it true even if I have a private or hard money lender to finance my down payment?

Any work around?, should I wholesale to stack my bank account before trying to get financed for a loan?

Thank you all for your time.

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Columbus, Ohio

Thanks for the reply, makes sense! Congrats on your new property Joshua.

1 Vote

Quote from @Joshua Parsons:

Quote from @Joe Villeneuve:

OK. I'm trying to understand the math here...which is very confusing. I'm making a few assumptions here based on the limited info given above. Here goes:

1 - The PP = $95k
2 - You didn't put in a Down Payment, because that would involve cash and the ...
3 - Cash invested = $15k, which would barely cover the cost of the "new floors, soft floor fix, fixing a wiring issue, and moving the lndry room.
4 - Not sure where the "new roof" cost falls here. When you say "negotiated in" I'm assuming the roof was replaced by the seller without increasing the PP beyond $95k.

Is that all correct?

Also, if this is a hold, what are the projected monthly expenses (taxes, ins), mortgage payment and rent?...which will generate your monthly Cash Flow?

The statement that has me both stumped and concerned is under the "Lessons Learned" question, when you answer it with the statement, "Always have backup plans in place for financing". What does that mean, and how does that apply here?

Sorry left out the details in all the excitement!

list price: 110,000

PP: 95,000

25% down. 7.625% rate

Negotiated the roof as seller pays after the home inspection so no out of pocket cost to us.

we estimate $15,000 in renovation costs for an ARV of ~$130,000

Mortgage payment of $508

Insurance and taxes $300/month

$160/month property management

$250/Month for the repair fund

estimated rent of $1300/month

Stupid newb question about your cost break down. Where is your monthly profit if all of your expenses after the mortgage payment is going towards what you have listed?

1 Vote

Following post.

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All Forum Posts by: David Ingram

David Ingram has started 4 posts and replied 21 times.

Post: 6 months' worth of mortgage payments saved up to be approved?

Post: 6 months' worth of mortgage payments saved up to be approved?

Post: 6 months' worth of mortgage payments saved up to be approved?

Post: 6 months' worth of mortgage payments saved up to be approved?

Post: Real estate Investor

Post: 6 months' worth of mortgage payments saved up to be approved?

Post: 6 months' worth of mortgage payments saved up to be approved?

Post: Landed our first Investment Property

Post: Landed our first Investment Property

Post: Seller Financing & Hard Money Lending