All Forum Posts by: Jeff Dulla

@Mike B. Will the loan be closed under the business/LLC? Or can it be closed under someone personally? If personally, ten business days from start to close is doable.

@Allen L. Average credit card balances and their equivalent payments will be counted. At a minimum, the minimum monthly payments for the cards will be counted. All monthly debts associated with car payments, student loan payments, all mortgage payments (principal and interest), taxes associated with any properties you own, home owners insurance, association dues, etc. All of that would be included in your monthly debt figures. 

@Kyle Inbody If you are seeking a Fannie/Freddie loan, your full time student designation does actually count for work history. If you are truly a documented full time student. If that is the case, I wouldn't worry about that part. 

What you need is to entrust a good lender to review everything with you. Do a full loan application, let them pull credit (you have three scores they will use and the model run for mortgage purposes is typically a little lower than what you are viewing). A good lender can take an example of a MFH, break out full monthly payments, debt to income ratio, help you plan what debt to potentially pay off (in turn put less down on the property). They can help you put a plan together for acquiring the first one and the next steps to take to put you in the right position to buy more (although focus on the first before you get carried away). 

I know a lot of people on here do not want to hear this but the best investors that I come across are people who worked full time jobs for a while and saved up. They didn't just create a portfolio over night. They saved up and have a solid amount of capital to work with. That may seem very obvious and not what all that sexy, but in my experience, that is reality. 

@Alex Silang @Dan Barli I agree with Dan. Depends on the specifics. If you are talking about investment, there are newer options you can possibly look into that will qualify you based on the cash flow of the investment. They are typically called Non-QM loans. Under that same description you will also find lenders that will approve you based on bank cash in flow, if you are self employed, rather than your net income on your tax returns. 

If you are talking about a primary residence, there are some options that will lend based on how much you have in assets. One of the main banks that I use for that is based in Wisconsin and does not lend in NV. However there are some other large ones that have similar programs if you have enough in assets. Not sure if that fits your situation but wanted to throw it out there. 

@Davante Dennis Pricing can change greatly from mortgage company to mortgage company. FHA is one product that often, lenders are making a lot of money on.

Based on the information above, I am seeing rates more in line with 4.625%/4.75%. Not sure if the lender is covering any costs or anything for you. It is easy to comment when we are not seeing the full scope of everything though. 

@Kevin Drouillard Here is what Fannie says about multiple financed properties. Please note, this only pertains to second home and investment home purchases. Fannie states that if you are buying your primary residence, there is no limit on financed properties. Meaning if you have ten properties already and you are going to buy your primary residence, that cap will not come into play. They will finance the eleventh purchase if it is a primary residence. 

Applying the Multiple Financed Property Policy to DU Loan Casefiles

If the borrower is financing a second home or investment property that is underwritten through DU, the maximum number of financed properties the borrower can have is ten. If the borrower will have one to six financed properties, Fannie Mae's standard eligibility policies apply (for example, LTV ratios and minimum credit scores). If the borrower will have seven to ten financed properties, the mortgage loan must have a minimum representative credit score of 720; all other standard eligibility policies apply.

There are plenty of banks and lenders out there that will follow Fannie exactly so you shouldn't have an issue going up to ten investment properties. For people starting out, another issue and maybe a reason you are asking about your primary residence, is debt to income ratio. If you are worried that you will not qualify for more investments after you buy a primary residence because you have no rental income offsetting the monthly debt service, that is a valid concern. Like anything, you can easily have all of the questions answered and also come up with a long term plan, if you find a mortgage banker or broker that you trust to help consult you throughout your real estate investing life. 

@Carlos Chavez Most doctor loan programs you would find at a bank or mortgage bank would be reserved for owner occupied purchases only. I have yet to see one for investment but that doesn't mean they do not exist. You may have to look at some less traditional options (not a medium to large retail bank or mortgage bank). 

@Zachary Anderson If this is a jumbo loan, then like you said it is probably a portfolio loan and requirements will simply change from bank to bank. It sounds like you are saying the loans are not under your name at all, you didn't personally sign for a residential loan, these are commercial loans that were closed and funded to the LLC, correct?

How that is viewed can definitely differ from bank to bank quite a bit. I know Wells might treat that differently than say Everbank (who I think is based in Jacksonville). If you would like, I can probably float the question through underwriting at a few places but no pressure. PM me if you would like me to look into this for you. 

@Spencer Harvey I know people have reasons for why they prefer a HELOC but I tend to stay away. I have seen people post that the only reason lenders on here don't support HELOCs is that they don't get paid to do them (which is actually inaccurate). Speaking just as an investor, I still would shy away from a HELOC for the simple fact that I am not certain how quickly I could pay it off/down.

HELOCs are based on Prime Rate plus a margin. Prime rate is a tool the Fed manipulates based on their forecast for inflation and where it is headed. It can change over time and the Fed has stated they still have intended increases to Prime rate planned for the next year or so. Long story short, your HELOC is going to carry a 6%+ interest rate to start with and most likely will climb from there. Not the most stable instrument for a longer term hold.

I would ask what your current interest rate is on your first mortgage. If it is really low, I would take a look at the aggregate cost of your debt once adding the HELOC. Depending on where your proposed aggregate rate falls, it may be a no brainer to refinance and fix your rate in. You also need to be very honest with yourself and how long you think it would take you to payoff a HELOC. Forecast out Prime rate and see if you have a contingency plan for what you would do if rates go to 8%,9%,10%.

@Alex Whittow I believe there is more in the docs that you sign than just this but this is an example of a disclosure most lenders have at every closing: