All Forum Posts by: Jeff P.

I have 100% equity in a single-family rental outside of Detroit Michigan. I am in the process of doing a cash out refi. The house appraised for a little more than what I expected. The lender's representative and I had spoken about 75% LTV all during this scenario.

Now yesterday, I was surprised with a lender estimate that was at 70% LTV. When I requested she run the numbers at 75% LTV, she then told me that there was a cap on the amount I could get (amounts to under 75%), and I would also have to pay points for that loan (75% LTV scenarios were at 0 points). This is several thousand dollars less than I would've gotten at the full 75% LTV, but she claims it is a Fannie Mae requirement?

Why this wasn’t disclosed long ago, I have no idea. Is she correct in saying this? The difference in the appraised amount versus the expected amount was not gigantic. However, I don’t intend on refinancing this property again - possibly ever. So I would prefer to pull all cash out that I can this time.

TIA for opinions/info.

Jeff,

it sounds like you have really been out through the ringer on this one, sorry that things have played out this way. As others have stated, I’m not sure of the reasoning, but, I would also have the same suspicion as Alan. While it does not help now, were local to your area and are always happy to review future projects. I hope this one turns out okay for you in the end!

Thanks Andrew. I will definitely keep you in mind when my next opportunity arises.

0 Votes

Quote from @Ali Radoncic:

Quote from @Jeff P.:

I will try to keep this brief.

TIA for opinions/info.

Can only be 2 reasons well 3 if we count incompetence by the loan officer.

1. Compensating factors ie. weaker credit score, weaker reserves, weaker DTI

2. Lender overlays - Some lenders will only write loans up to 70% for "risk" reasons and decrease the likelihood they would have to buy the loan back from fannie or freddie.

3. Loan officer incompetence - sounds like they quoted you on 75% LTV but once the underwriters got a hold of it, they restructured.

Without having the convo myself, Id be willing to bet its a combo of 2 and 3

Unfortunately, I don't see it being #1 or #2.

I'm in really good shape on #1.

If it is #2, there was more than enough time to correct my expectations.

#3... Well she sent me the final estimate @70% and said nothing. It was Friday evening. We were trying to get this closed by Feb 29. She requested it signed by Sunday so processing could resume asap Monday morning. Had she given me a heads up early Friday, and maybe accompanied the 70% with the 75%, then discussions could've occurred. Instead, it was slipped in without explanation as if I wouldn't notice??

I'm leaning towards #3. There have been other hiccups along the pathway.

You'd be disappointed if you knew the company.

1 Vote

Quote from @Account Closed:

That does sound frustrating. It's odd that the lender didn't mention the cap on the amount earlier. It's possible there are Fannie Mae requirements in play, but it's always a good idea to double-check with a different lender or do some independent research to verify. If you're set on maximizing your cash-out this time around, it might be worth exploring other options or negotiating with your current lender if possible.

I'm looking to speak to a competitor to see their angle.

0 Votes

Quote from @Account Closed:

I'd suggest checking with a few more lenders to see if they have the same restrictions or if you can find a better deal.

Sometimes, different lenders have different rules or ways of doing things, so it might be worth shopping around a bit. Also, maybe try asking the lender why this wasn't brought up earlier. It could give you some clarity on the situation.

This has been the longest cash out refi on an investment property in the history of mankind. I'm resisting starting over.

0 Votes

Quote from @Jacob Sherman:

Cap is usually 500k in cashout . What is the scneario looking like ?

Still in limbo

0 Votes

Quote from @Alan Lacey:

there is no cap at a 70 ltv. Does your initial LE show that loan was locked? If it wasn’t then that is something that should have been noted when they disclosed, and my guess is they are trying to get closer to the terms on the LE by going to a 70 ltv as that has fewer price adjustments. Fannie publishes what they charge to price in adjustments based on different loan factors if you google fnma llpa it will come up.

The only other reasons I could think of is 1. If going to 75 ltv and additional price adjusters were just enough to make it the loan exceed fnma points and fees test so they have to limit to 70 to meet that requirement. 2 It was a Dti issue and they couldn’t approve you for a higher loan, but presume if that was the case they would have mentioned either reason before.

Thanks for the insight! Doubt it is DTI, I was well in the clear. Maybe the FNMA test is the reason. She supposedly reached out to her "team" and is awaiting response. It has been over 48 hours, so it seems silly to me.

0 Votes

Quote from @Michael Smythe:

@Jeff P. have you tried

Kristopher Natschke?

I have not.
I’m so deep in this one I’m
probably not starting over.
After a few exchanges this afternoon, she’s said to be working on my request (as if the request is new and isn’t 45+ days old). This will likely make it tough to close before the first. This is not the first time she has let details slip through. If I were to use this company again, I would request not to have her handle my case.
I guess I’ll wait to see…

0 Votes

Quote from @Devin Peterson:

Quote from @Jeff P.:

Quote from @Devin Peterson:

Quote from @Jeff P.:

I will try to keep this brief.

TIA for opinions/info.

Sounds like a quirky overlay with the blender that you are using. have you looked into DSCR options?

Yes, I've looked at DSCR. This was much "cheaper", but frustrating.

Frustrating? How so? Generally DSCR products are 10 times easier than any other governmental or conventional product. Maybe it was the broker or lender you were working with

Devin- I’d be interested in talking with you about future options.

0 Votes

Sorry, my response was stating that this conventional refi was cheaper but frustrating as compared to the DSCR option.

0 Votes

Quote from @Devin Peterson:

Quote from @Jeff P.:

I will try to keep this brief.

TIA for opinions/info.

Sounds like a quirky overlay with the blender that you are using. have you looked into DSCR options?

Yes, I've looked at DSCR. This was much "cheaper", but frustrating.

0 Votes

All Forum Posts by: Jeff P.

Jeff P. has started 8 posts and replied 37 times.

Post: Brrrr cash out refi Fannie Mae surprise limitations?

Post: Brrrr cash out refi Fannie Mae surprise limitations?

Post: Brrrr cash out refi Fannie Mae surprise limitations?

Post: Brrrr cash out refi Fannie Mae surprise limitations?

Post: Brrrr cash out refi Fannie Mae surprise limitations?

Post: Brrrr cash out refi Fannie Mae surprise limitations?

Post: Brrrr cash out refi Fannie Mae surprise limitations?

Post: Brrrr cash out refi Fannie Mae surprise limitations?

Post: Brrrr cash out refi Fannie Mae surprise limitations?

Post: Brrrr cash out refi Fannie Mae surprise limitations?