All Forum Posts by: Jason Little

You should look into an FHA 203k loan if you plan to have a licensed contractor handle your rehab. That will cover your purchase price plus the construction expenses. Fees may be slightly higher than a conventional loan up front, like you may have to pay for a second appraisal, but you should get a prime rate, while having a minimal down payment. Shop your situation to a handful of local lenders so you can compare their terms.

@Mary White you need to research "Delayed Financing".  This is the specific loan type when you purchase in cash, then shortly there after refi into a mortgage. There are numerous forums on BP about this topic. Freddie and Fannie both have their own guidelines. 

Reverse is not an option, keep researching. 

If you are planning on pulling money back out in the near future, then it makes much more sense to start with some equity. If you start at 0% down, it will take much longer to build up equity, (while a majority of your payments go toward the higher interest figure). If you start with 20% equity, then put in some sweat equity to increase the value of the property, you can pull back out more money much sooner. 

It depends heavily on your personal strategy, that's why you should talk about your goals and plans in real estate with your local MLO, a good one will help guide you in the direction of programs that best help you achieve those goals long term.

Is it an investment property or primary? How is your credit? need more information to estimate terms.

Consider the long term implications of the two loans, you will have a higher interest rate with more in PITI payments every month if you put 0 down, and your long term costs will thus be significantly higher as you are now paying interest on that chunk of equity you could have banked.. Depending on how long you plan to hold the property it could be more beneficial to hold that cash up front (short term) or to keep long term costs as low as possible and plan to live in the home for a longer time.

True about USDA guidelines, FHA should only deal with owner occupied residences. So as long as you fit into income and DTI guidelines, you should have access to FHA financing on your primary, just remember that means you will have to pay PMI, so taking the time to compare upfront savings vs long term advantages is imperative.

If the investment properties cash flow then they should have no negative impact on your ability to get a primary mortgage. They should only help your DTI if that is the case. Is it a short sale that doesn't qualify for FHA financing? Which i assume is what you are inquiring about at less that 5% down.

The fees should not be much higher than any other conventional loan, since it is still backed by Freddie and carries less risk. Ask around a few different local lenders where you intend to buy and compare their fees and responsiveness. 

Your limits should go up to 636K in that case

https://www.fhfa.gov/DataTools/Tools/Pages/Conforming-Loan-Limits-Map.aspx