All Forum Posts by: Gabe T.

@Anthony Saunders

You could start by trying to ask her to co-sign for no equity, just cause she’s your mom and presumably would want the best for you.

@Jarvis Cheng

I don’t think it’s illegal or legal, more do you want to do it permitted or not. We have done unpermitted conversion of a garage to a studio, and have rented it out. But it can cause problems with appraisals and conventional loans. Last appraiser just asked us to remove the cooktop to get refinanced (disconnected it and reconnected it for inspection). If they think it’s unsafe, they can nix the whole property and the bank won’t let you borrow.

Permitting the construction will cost a LOT more, and take a LOT longer, and may not be possible at all (or make financial sense). Yes, it can decrease the pool of buyers if you eventually want to sell, but it still happens all the time. In some areas, it’s the only way to cash flow (California).

@Qiong L.

Interesting. I also had the loan agent at Wells Fargo run the numbers. Here’s what he told me. For a 430k investment property, to borrow $260 - 60%, with 770 credit score:

Delayed financing within 60 days - 3.625%

Refi only after 6 months - 4%

Refi cashout after 6 months - 4.5%

I’m also discovering this after the fact, that they won’t include gift money in the loan, unless it’s seasoned 6 months. So even with gift letters, the bank will only loan what I contributed myself.

@Will Fraser

Just a heads up. Both Wells Fargo and another broker both confirmed to me today that gift funds cannot be recouped with delayed financing. They will only loan the amount from the owners’ assets. Even with gift letters. You could season it first, but instead of 2 months, WF requires 6 months.

Different than what I was expecting. Just goes to show, the internet only knows so much. Haha! I’m probably just going to wait until 6 months and do a conventional cash out refi.

@Qiong L.

I'm in the process now. Closed on a cash offer 2 weeks ago. 75% LTV, currently locked in 3.85% last week. Technically, it's different than a cash out refi as I understand it because it does not require a 6 month waiting period from purchase. It's called "delayed financing." At Wells Fargo it needs to be initiated within 60 days of close. At another lender I compared to, needs to be initiated within 6 months. I was quoted slightly lower rates on delayed refi when comparing to cash out.

I’m still early in the process, so looking forward to hearing other experiences.

@Stephen Foltin

In regards to your question about paying cash and then converting it to financing, yes you can do this, but obviously you need to close with cash. It's called a "recoup loan" or "delayed financing." Its similar to a "cash out refinance" but some banks have different rates for it, and call it something different. Wells Fargo has a 60 day from close deadline for a recoup. Another bank I'm working with has a 6 month deadline. LTV IS 75%.

I just closed last week on a property that I put in a cash offer, which was accepted.  The cash offer was put together from different sources personal/family, with the understanding that once I refinance that they would get paid back.  The ability to put in a cash offer was amazing, and I’m sure it put us in a select group at the top of the offers.  My first cash offer, and probably not my last!