All Forum Posts by: Jason Wiser

@Jeff Gold no sure how to calculate PMI? That is a question for lenders I think. Sorry

@Jeff Gold Yeah 1% is a pretty big deal for the mortgage but more exciting is the ability to get the property for only 10% down. We are looking at only about an 7% COC, but at this time... cashflow is very hard to find in our area, so $379 / mo cashflow on a second home, with a positive COC is good. And also, I love this property and will have a lot of fun for our family on the lake, it will teach us how to do ABnB better, and we will also be a blend of BRRRR meaning we are living in it, renting it at low cost for ABnB, and remodeling it as we go.
So... we are excited! 

hey @Jeff Gold Thanks for jumping int he discussion. 

I am not sure how to interpret the Freddie Mac guidelines from a legal standpoint, I can only tell you what my lender told me. 
That said, they told me that the condition to have it "available" is in there to prevent long term renters, even 6 months or seasonal long term. We qualify for "available" when we list to ABnB or VRBO because we can pull our listing whenever we want and so therefore it remains "available", at least that's how he explained it. 

We will be self managing this anyway, at least for the first few years as this truly is a vacation / second home for us. That said, we could hire a management company to manage on our terms, but could not rent rental rights to them. They can clean, maintain, and assist with listings, but they cannot re-rent the property. 

Yes, our bank is lending to us as a second home, not investment because we meet the criteria. 
The mortgage from this lender for investment property would have been 4.25% but as second home it is 3.25%

As far as I understand, PMI is applied to homes until you own 20% of the property and the PMI "falls off"

Hope that helps...

For sure. I figure that is what the forum is here for. Thanks for the upvote !

Thanks everyone for the feedback. 

The takeaway is exactly what some of you have suggested, "Define investment Property" Thanks @Joe C. and @Keyla Rosario and @Dave Stokley
I spoke with my lender and here is a little more info that might be helpful for other that read this discussion. 

First off, they explained that they needed this because I was applying for a 2nd home and was only paying 10% down and that triggered PMI. So I now have options, either pay more to avoid the PMI or sign a document.

About the PMI, I weighed the plusses and minuses of paying PMI short term vs. paying 20% down. I have enough to pay the 20% to avoid PMI, but being that it is winter, speculation of the market being so unpredictable, etc. I decided that 10% and retaining cash was a better decision than suffering a relatively small PMI expense. 

So, now back to the definition of "Investment property"

TL;DR - lender is helping me to write the letter in a way that prevents fraud AND allows me STR options

Here is the definition that was sent to me from my lender regarding the definition: source Freddie Mac second Home Mortgage guidelines 

The Borrower must occupy the second home for some portion of the year

The Borrower must keep the property available primarily (i.e., more than half of the calendar year) for the Borrower's personal use and enjoyment

The Borrower may rent the property on a short-term basis provided that the property is not subject to any rental pools or agreements that require the Borrower to rent the property, give a management company or entity control over the occupancy of the property or involve revenue sharing between any owners and the developer or another party

You were right @John Transue and @Keyla Rosario and @Brent Huling I only need to occupy it part time, and can rent it out with no penalty of fraud. 

So, I am pleased to say that, because I have an amazing lender, I will be CTC by 9am tomorrow! 
Thanks again for the discussion

I am in the 11th hour leading up to clear to close. My bank just  sent me an email telling me that the underwriter wants me to sign and date something that says I will not use this property as an investment property. 
We are using this property as a second home and a vacation property, but still want to AirBnB to help offset cost of mortgage and repairs. 
Will I be committing fraud if I state that I will not use as "Investment property" and then list it on AirBnB? 

What can I do?

Thanks @Michael K Gallagher  I will ask my buyers agent about this. 

and I see now the vote if 4-0 do not contact the seller directly... thanks

Thanks @Sam Hecht you are the third response to share this consensus, so I think we can put this topic to rest... 

It is a bad idea to contact the seller directly. 

Thanks to everyone. 

Hi @Joshua B. yeah, that's what I meant to say. We are using a buyer agent and we are thinking that might be why the seller agent is not being so helpful, and why this might be a case where you could reach out to the seller directly to make sure the sellers agent is doing their job. 

hey @Drew Sygit Thanks for joining he discussion. That makes sense about not wanting to be pestered. It is kind of implied and intuitive to not contact seller, but I was just wondering if anyone does that. I see your point. 
And sorry about not being clear in the post, we are using a buyers agent. And that is the issue, I can see where going direct to the sellers agent might be a better option the way things are. Just we are loyal to our buyer agent. They are amazing and are helping us so much.