All Forum Posts by: Fyzl Atmar

I have a veteran client who unfortunately can't use their VA entitlement due to having a judgement on his Credit Report. The judgement is since he co-signed on his daughters student loans which she defaulted on. In a nutshell he is looking to finance a construction in Ocean Shores, Washington. He has around 50k to put down, the cost of the lot is 9k and he found a local developer that has developed the majority of the properties in the area for a cost of around 150k. The comps for after construction range from 200k-220k for the area. Since he can't go the conforming loan route we are looking into hard money. Looking for a lender that is willing to lend for the construction with a construction to perm loan on a fixed 30yr term. Or something of the like. Any help would be greatly appreciated!

Matthew Greco you can use both accounts as income without having to actually have scheduled disbursements. Their is a calculation that relies on a couple of variables including your age & retirement account guidelines including maturity and penalties. In essence you can bolster your DTI and/or Reserves utilizing your balances on your retirement accounts. If you check out the Fannie Mae selling guide part B subsection on using retirement accounts as income you will be able to see the calculations for your particular instance. It's pretty straightforward and can be just the boost you need to bring your DTI down or add needed reserves when trying to finance an investment property. Reach out if you have questions, best of luck investing!

@Anthony Talpak a couple questions to give you a better answer. In addition to the 150k HELOC how much more do you owe on primary for the multi family? In a conventional cash out refi you are able to take up to 70% LTV. Most lenders will want to pay off the HELOC as well to do the refinance. With a 1.1million appraisal your looking at a max LTV of 770k, minus the cost of the HELOC at 150k gives you 620k. From there just minus the amount you owe on the primary mortgage to give you the amount you can take in cash out. Additionally you have to remember most lenders will require PITI reserves of either 3, 6, or 12 months depending on your credit and DTI. I'm not sure why you believe you are unable to use your rental income in qualifying as you must to offset the PITI monthly obligation of the investment property, the documentation a lender will use to verify your rental income will be either your Schedule E on your tax return (regardless if you reported rental loss or gain, as this will positively or negatively affect your DTI) or current lease agreements in most cases both. If you have any questions please feel free to reach out!

@Frank Grigus Jr you are most definitely right, getting out of the 6.375% should be your immediate goal. No point paying that much interest. Refi out of your high rate 30 year in to a significantly lower rate 10 year. Then just focus on your goal of paying it down free & clear and increasing your cash flow. Best of luck brother!

@Frank Grigus Jr it all depends on what you would do with the additional savings if you refinance into a new 30YR Fixed. If your goal is to gain cash flow then paying off the mortgage would definitely help. By refinancing into a new 30YR you will be paying mostly interest again on your monthly payments whereas now even with the high interest rate, you have been paying for 10 years so your paying more principal down now at 1/3 of the life of your current loan. Rather than refinancing into a 10 year where you will be paying more than what you are now have you thought about a 15 year or 20 year where your payments might not be half of what your paying now but will be significantly less than your current mortgage. The picture would be more clear if you can provide your current "high" interest rate that you have been paying for 10 years. If its not to high it might make sense just to pay more monthly to pay down your principal faster since you only have 20 years remaining on the life of the loan and are paying a considerable amount of principal more now than you would have at the beginning of the loan. If it is to high than refinancing into a shorter term vehicle 10yr, 15yr, 20yr might make more sense. Just remember that a mortgage is an Amortized Loan and what that means is that in the beginning of the loan the majority portion of your payment goes to interest with the remaining amount going to principal, towards the end of the loan a majority of the payment is paying down principal and the remaining amount going to interests. In this way the banks make sure they are paid first. In your instance at 10 years of monthly payments made your finally paying down more significant amounts of principal rather than primarily interest. It would do you well to look at the amortization schedule for your current loan and compare it to prospective refinance option amortization schedules to find out where you stand in paying down principal the fastest. I hope this is of some assistance! If you have any questions in running the scenario the above feel free to PM me, always happy to help!

Not worth the hassle unless you want to incur fines. If you can get into the property at a great price you should consider a flip. More than likely HOA will catch on especially since there are 32 units. You should try and see if you can contact the HOA and be honest about wanting to rent out your unit after you purchase. Chances are there might be a waiting list or something of the sort or you can maybe convince the HOA board to increase the amount of rentals from 5 to 10. Honesty is the best policy and you might find the HOA willing to work with you since you reached out. But do not expect to not be caught, more than likely you will. Just be forthcoming and let them know you want to rent your unit out. You never know what could happen until you try. Best of luck investing!

@Drew Moyer great job looking to prepare yourself for success. There are a few great rules to live by to maintain a stellar credit score. To start with, your credit score is determined by the big three bureaus, Transunion, Equifax, & Experian.  They are the recorders of your liabilities, revolving credit, installment loans, and other financial obligations. Your credit score or specifically the one that Lenders use is the FICO which is an independent entity that uses its in-house algorithm to determine your credit score using the information obtained from each credit bureau. This score will be different than Credit Karma or other credit monitoring applications since they utilize the Vantage Score which is the Credit Bureau's equivalent to FICO but the scores are slightly different. A few steps to build a great credit score are...

- Becoming an Authorized User on Cards from family & friends that are High-Balance, Low Utilization Percentage (less than 30%), no derogatory info on the account (late payments, delinquencies, etc.), and a established history of time since account being opened. 

- Attempt to have utilities and rents that have on time payments to reflect on your credit report. This is done by reaching out to the Utility company or Landlord/PropMgmt. and requesting to have your payment history reported. 

- Establishing credit and utilizing less than 30 percent of it.

- Limiting the amount of inquiries in the past two years below 8 (tricky if shopping around for credit, be wary)

- Make sure not to be late on ANY payment obligations

If you use common sense about your financial responsibilities & obligations you will have no problem obtaining and keeping a great credit score. If you have any questions feel free to reach out anytime! Your head is in the right place though, keep it up!

@Adam Petterson they won't charge you and your in the clear. The fact that they haven't sent you disclosures within three days of taking an application from you means they are out of compliance. I would recommend switching to another lender, you don't need to deal with the hassle of chasing down you loan officer. If anything the role should be reversed. It should be easy to switch lenders, they all will ask you for the same documentation. Best of luck!

@James Andrews why would you in essence purchase a property worth 80k for 120k (95k current mortgage plus 25k to the agent for the deal)??? Your walking into negative equity and a loss of 25k which I don't believe the smartest use of your funds. It seems to me that the owner should consider a short sale but would be ecstatic if you went ahead with this deal. You should consider using your funds for a down payment and purchasing the property at the appraised market value or below. Their could be other factors that I am not aware of but in my opinion it doesn't make sense to pay 25k to walk into an underwater mortgage. If I am missing anything please correct me. Thanks and I hope this helps!

@Meti Kay all lenders selling to the secondary mortgage market (fannie, freddie, and ginnie) are playing with the same rate sheets. The market determines the rate and its up to your lender if they want to take it short or not. Internet Lenders generally take it a a quarter to half a point short, compared to brick and mortar mortgage brokers, and mortgage bankers generally don't take it short unless their is a past relationship and the leeway from the bank is their. But you also have to keep in mind that its not only the rate but the ease of doing business and getting qualified especially if their are tricky action items in your loan case file. Generally internet lenders like quicken and loandepot have a churn and burn model and if you don't fit it they move on rather quickly, rather than help you understand and fix to come to a lendable point you are left with unanswered calls. What I recommend is finding a lender/originator/banker build a relationship and go from there. Everyones playing with the same rates and a majority of the same products excluding private portfolio lenders. I hope this helps! If you ever have any questions please reach out, always happy to assist!