All Forum Posts by: Jeff Shumway

@Conner Olsen the origination fee is typically paid by the buyer and in most cases cannot be financed into the loan amount. The only way to finance in the closing costs would be to give a lender credit by increasing the interest rate slightly. This is a little more dependent on the deal and cannot be done on every deal. The bank that services the loan does not pay an origination fee. 

Hey Juan, you will need both to complete a real estate purchase. The mortgage broker is the one that connects you with financing to purchase the home. The realtor is the one that shows you all the different properties. The mortgage broker is the one with the money- realtors are not banks. They do not have money to lend to purchase a home. 

Unless you have the money to buy the property cash, you will have to use a mortgage broker of some sort. You also will more likely than not have to use a realtor as well since they have access to the lockboxes on the houses. Realtors are definitely less necessary than a mortgage broker. 

Typically realtors expect to make 3% on your deal but their fees are usually paid by the seller. Mortgage brokers usually charge some sort of origination fee and also make their money by selling your loan on a secondary market. For example, our fee is $1485 to cover processing and underwriting. 

Hey Jonathan, so long as everything is in the same field, you should be able to use your college transcripts/internships to make up the 2 year history. This works well for specialized fields, i.e. finance, engineering, math, etc. You might have a tougher time if your studies were in something totally different than your job (i.e. art major to data analytics job). 

Hey Omar, unless you have $237,000 cash in hand, you're going to have to finance the deal. The property definitely sounds like it has some issues which may make any traditional bank financing difficult. With the repairs the property needs, it sounds like it will not pass appraisal. You can always look into a renovation loan to finance in repairs, but that can be a long, drawn out process with lots of red tape. 

It sounds like seller financing might be a good option for you. 

It's my job to figure out my client's debt to income ratio, not the client's. And of course, most investment property DSCR loans don't even require a DTI/income calc.

Hey Kameron, as long as you have an executed lease, you should be able to use 75% of the rental income from the property to offset the mortgage payment. 

Yes, you should absolutely get a preapproval. A preapproval will let you know your budget so you don't offer on a house/loan that you won't get approved for. Additionally, many agents won't even take you shopping until they see your preapproval. They don't want to waste their time if you end up unable to buy anything. A preapproval shouldn't take more than a day, so you should be able to offer on anything that comes onto the market pretty quickly. 

If they are asking for points before the loan and have subpar communication, I would recommend you run away very quickly and do not send them any money. 

Hey Kyle, there's a lot of misinformation about the VA loan out there.

If you work with a lender who is familiar with VA loans, they should actually be much faster to close than a Conventional loan. VA loans are much easier to qualify for than a conventional loan. Obviously the zero down lowers the asset requirement to qualify, but also the VA loan is much more flexible with the debt to income ratio than a Conventional. (Debt to income ratio is the ratio of your gross monthly income to your gross monthly expenses - proposed mortgage payment, credit card payment, auto loan, student loans, etc.). Conventional loans have a hard stop at 50% but the VA is much more lenient. Conventional loans also require a 25% down payment for a 3-4 unit.

Additionally, VA loans do not have mortgage insurance. If you put anything less than 20% down on a Conventional loan, you will have to pay monthly mortgage insurance. Paying mortgage insurance does not benefit you in any way so you're much better off without that monthly expense. VA loans also have lower interest rates across the board than Conventional loans will.

When you do a VA loan, you also will have the option to do a streamline refinance ("IRRRRL" - Interest Rate Reduction Refinance Loan). When you may 6 months of on time payments, you can look into doing this refinance type- it does not require income verification or appraisal. Most lenders can help you do this refinance to lower your rate with almost no cash out of pocket. It's a great benefit.

Wow. How will you manage it? Taking care of horses is a huge time commitment and most horse want someone with equine experience taking care of their horses. I've seen places where the boarders handle stalls, feeding, turnouts, and blanketing for the horses on their own but (in this area at least) it's more common for there to be a head trainer running their business at the facility who keeps an eye on all the horses. Horses are astonishingly accident prone and their symptoms of illness may look like nothing unusual to the untrained eye.