All Forum Posts by: Devin Ryan

The issue that you may be running into at this point in time could be the rate market. With a pure investment property, the risk is obviously greater than that of a primary residence. The rate market has gone absolutely nuts in the last couple weeks and while the difference between 20% and 25% down may seem insignificant, it does have a solid impact on the rate. 

With many mortgages now being priced below par as is, it's possible that only 20% down on a NOO investment property is just costing more than compliance will allow for in points. Not saying this is certainly the reason, but it's something I have seen on my end as well.

Hi Kasey,

More than happy to assist in the process if you're looking into purchasing a second home. The process is virtually the same as that of purchasing your primary, but we can certainly connect and I can address any questions that you may have. 

You can request the PMI to be removed at 80% LTV, but the lender is required to remove it when it reaches 78% LTV (from the initial appraisal).

As a note - if you put 10% down, you can also finance the MI into your mortgage payment. Split up over the 30 years, people sometimes prefer taking this method as it helps to minimize the monthly payments. Just a thought. 

Hi Logan, 

This is a smart and very common step to take here. As for your question, you do not need extended landlord experience before being able to count the income towards your DTI. If you make enough to carry both mortgage payments (current and proposed) to still qualify, you can absolutely do that and then secure the rental after closing. However, if you're planning to use the rental income as a means of keeping your DTI in the qualifying range, you will need to have a lease agreement in place for your lender in order for them to be able to utilize that rental income. Unfortunately, you cannot simply use the fair market rent in these situations and will need to have that level of documentation.

Having her as the primary borrower may be the more feasible option to take as she is work from home and the location doesn't necessarily matter. For you, the temporary housing would have to be hit as an additional debt during the contracts as well most likely. I'm assuming you're paid as a 1099, but want to confirm that? If so, how many years have you been doing this? 

 And she will be staying there full time, even when you are out on contract, correct? As for your contract, is housing provided, or will you be finding temporary housing during the course of the contract?

Hi Luke, 

Looking for a little clarity here. How much time will you spend living in the residence and how much time will you spend working out of state? Just trying to fully understand what the situation is here for where you will be splitting your time. 

Hi Karan, 

Lender here in CT! How long have you been in your current residence? Were you able to take advantage of the low interest rates to keep your monthly payment lower? You can use the projected income from the original property to give additional income if you're going to use the second home as your new primary residence. This may help to keep your ratios in line to be able to fund the purchase of the second home. 

Additionally, how much do you plan to put down on the new purchase? If you were going to put 20% down, have you considered putting less down and instead using some of that money towards clearing some existing debts? 

Hi Kanjana,

5-10% will be difficult for an investment property. For a purchase of an investment property, generally 15-25% is required for most lenders. Personally, my team has 15% down, but the specific overlays can vary by lender. Being a first time real estate investor shouldn't be any issue. The process is virtually the same from purchasing your primary residence with slight exceptions!