All Forum Posts by: Jared Bouzek

@Dave White I think it depends on who you're working with - both agent and lender. Different people are better at getting your offers accepted. I haven't seen issues with getting low down payment offers accepted. I'm not saying you'll win every one, but I haven't noticed a trend and I tend to do a lot of the low down payment type of loans.

@Dave White It depends on the program at the time you purchased. Right now there are 3 Conventional programs available for 3% down payment on a 1-unit primary residence. Fannie Mae offers HomeReady which has income resctrictions and Conventional 97 which has no income restrictions but has a First-Time Home Buyer requirement. Freddie Mac offers Home Possible which has income restrictions and starting in July they are rolling out a new program called HomeOne which will have a First-Time Home Buyer requirement. Aside from that you have FHA which allows a 3.5% down payment. Since you won't meet the FTHB requirement anymore, you have HomeReady & Home Possible depending on your income at 3% down, FHA at 3.5% down, or you can do a straight Conventional mortgage at 5% down with no restrictions. For the income limits, most of the Denver metro area is 100% of AMI which is around $84,000. There are a few low-income census tracts which have no income restriction.

Long story short, at the very least you could do 5% down and possibly less depending on your circumstances.

@Dave White I think your sense about your condo is probably accurate. You purchased at a time that you didn't have investing in mind. Thankfully due to our appreciating market, you'll come out ahead on the "investment" but it may not be a great option for you to hold on to when there are plenty of options for you to redeploy your capital in Colorado. I'm not saying the condos & townhouses can't work, but you have to work harder to find something that makes sense with the HOA fees.

The good news is that if you're looking to conserve capital for investing, there are still some options for you to purchase your new primary with minimal down payment (3-5%) and still have funds left to find more properties. If you're looking for cash flow, you may need to look at properties that need some rehab work, lower price points, and maybe even look further north or south along the front range.

@Alexander Meisner The FHA 203k is a rehab loan meaning you could purchase the property and finance the costs to rehab the property. In a sense, yes you could purchase for $150,000 and get a $190,000 loan for rehab expenses, but I would say it's not like they're just going to hand you the excess funds. You would need a general contractor to bid the project for you and they would get draws from your rehab funds similar to having a construction loan combined with your mortgage.

The issue with using any owner occupied loan whether FHA or Conventional is that you are certifying that you intend to live in that house. My contention is that if you're going into it knowing full well that this is just an investment and you have no intention of continuing to live in the house afterwards, you are taking advantage of financing not intended for that use and could be accused of committing mortgage fraud. Nobody is necessarily going to stop you from selling the house before 12 months are up although your mortgage company may not be very happy because they lose money if you pay off the mortgage typically within 6-8 months of closing.

The benefit of doing a rehab loan would be gaining the ability to do a large rehab like this cost effectively when you have limited funds of your own to use. If you decide to go down this road, I would recommend you do it while you still have your job because once you quit and become an agent, you won't have qualifying income to use for quite some time. Whether you do it with the Conventional Homestyle or FHA 203k, you could put minimal funds down (3-3.5%) if you're doing it as an owner-occupant.

@Grant Stucki As has been implied in some earlier comments, it's difficult to really have an answer to this question without defining your goal. Nobody really sets out to own 25 units just for the sake of owning property. Your true goal is connected to your Why and you have to outline that before you can understand where you should be investing. This along with your investment time frame are key factors to consider. I would nail that down before making the decision on where to invest.

@Alexander Meisner Depending on the circumstances, you could attempt to purchase it with an FHA 203k rehab loan. This would allow you to roll the costs of the rehab into the loan amount. As has been stated previously, you would need to live in it for a year before you rent it out to satisfy the requirements of your FHA mortgage.

@Alexander Levit There are a few different structures in the mortgage lending world. Brokers can originate on behalf of any number of wholesale lenders, so the options are unlimited I suppose. In my opinion there are really only a handful of wholesale lenders worth brokering for because their rates are going to be relatively similar, so you narrow down to the ones who execute well and the only thing that separates them are niche programs they offer or willingness to deal with certain borrower characteristics. 

@Alexander Levit Part of the timeline right now is compliance driven. The fastest you can possible accomplish the process right now is 8 days because that is what is outlined by the CFPB. Outside of that, probably your next biggest time driver is appraisals. Aside from going 100% automated with appraisals, you won't change the supply/demand effect there so that will be a limiting factor. Then the next biggest time factor is probably the borrower themselves and how timely they are at responding to requests for certain documentation. I think those last two variables are more difficult to control, so the process can be much quicker but is not always predictable no matter how well we may set expectations up front.

As far as your experience with lending, a lot of that scrutiny is once again driven by compliance. It's not that we want to grill you on every little financial detail. It's that certain government entities have said that if we want to comply with lending policies, we must deal with certain financial details. Now your lender has a big part in making that process smooth and easy for you, but it's likely not unique to that specific lender. 

There are lots of people who walk away from the process feeling good about it. That's a huge part of my job - making the experience awesome. And as a result, I have a lot of people who come back and work with me repeatedly. So maybe the key for you is finding a lender you enjoy working with who has their ducks in a row.

@Eric C. I know this was posted a few days ago, but I think I understand your question correctly. The answer is yes, you can use funds from a cash-out refinance to purchase another property. You do not need to season the funds. You could do both the cash-out refi and purchase simultaneously. Your lender will need to take the terms of the refinance into account in your DTI when doing this. Let me know if you have any other questions.

@Alexander Levit There is nothing really unique about Rocket Mortgage anyways. It's a marketing ploy by Quicken to get people to use them, but it is technology available to any lender. I've seen statistics recently that Millennials are actually showing a higher rate of working face-to-face than prior generations. Yes we're technologically adept, but I think Millennials appreciate a certain trust factor that comes from knowing who they're working with.

To answer your question, could technology totally replace the loan officer in some cases? Sure. Maybe on your vanilla, W-2, high income, high credit, high down payment, we couldn't possibly screw this up type cases. The problem is that there are so many cases that don't fit that box, so there needs to be a human element to navigate the complications that come up. I don't think that will ever go away.