All Forum Posts by: John Burke

I know they can be financed just like a stick built construction loan, however, my credit union is not doing construction loans right now and does not have a time frame for when they will (SECU).

I want to use the land as down payment if possible and finance the modular and the site prep for it.

Looking at getting a new modular duplex or a SFH.

Thanks

I have a OTC program available for this type of scenario.

0 Votes

Asheville, North Carolina

Quote from @Brian C Kelleher:

Hi All,

I am looking to buy an owner occupied 2-4 family in the East Boston/Chelsea area this spring with a 5-10% down payment. I already own a 2 family house in the Boston area so this would not be first time home buyer.

What are some of the most advantageous loan types you've heard of for this? I am looking at FHA and the new Fannie Mae 5% down payment program, but someone mentioned a 5% down payment program with Cambridge Savings Bank that had no PMI. Do you know anything about this or any other low down payment programs with no PMI? How about any grants available for a second time owner occupant home buyer? Any advice would be greatly appreciated.

Brian

As has been mentioned, if your current home has an FHA loan, FHA will not be an option for the new one. Let's say your current home has a conventional loan, FHA could be an option but you have to be aware of the self-sufficiency test requirements for anything over a duplex. This test could make it more difficult to qualify.

Now that Fannie/Freddie have gone back to 5% down on multi units, as long as you have good scores and dti, conventional may be the best option.

Be careful of lenders promoting no PMI options. They are either covering the PMI in the rate or it's a CRA program with income limits.

0 Votes

Boston, Massachusetts

Quote from @Joseph Fenner:

I am looking to house hack a property out of state with an FHA loan within 4-5 months. What should I know about using FHA loans for out of state investing?

What complexities should I expect and what else should I know regarding the financial side?

Find a duplex or a property with an ADU then you can use the rental income to qualify and pay part of your mortgage payment.

0 Votes

Unfortunately, reimbursement for expenses (e.g., work related supplies, travel, meals and entertainment) are not considered wages as they are provided for offsetting a specific expense incurred while performing a service for the employer.

0 Votes

Quote from @Rajiv R.:

Quote from @Jacob Sherman:

all if it looks pretty cheap and standard if you ask me . What is the interest rate ? the CPL and Abstract are title . you are free to choose any title company of your choice . The origination is what they are charging to do the loan

Thanks. First is a 7/1 ARM 6.875 and the other is 30 yr 8.00.

Take the ARM. In either scenario, you're most likely going to refinance if/when rates comes down so you may as well take the lower rate.

0 Votes

Quote from @Samuel Metcalf:

Hey all, first post, please be nice ;)

My first property purchase was in 2017. I very much was guided by a family member and just did whatever they said. Been a great experience for 7 years. On a whim, I recently reviewed a monthly mortgage statement and saw I'm paying $150 in PMI. I have over 40% equity based on loan amount of $200K and general market value of the property at $400K (unsure what assessed value would be).

I'm thinking I'm a candidate for PMI removal. Called the bank, who quickly said "sorry, your loan does not have an option for PMI removal." Apparently, the contract I executed included a clause for PMI for the life of the loan. I'm shocked and embarrassed because I've never heard of "forever PMI". Yes, I'm a noob, but I've only ever heard of PMI coming off once you satisfy equity requirements. So here I am thinking oh great, I am past due on doing this, but at least I'll start to save another $150/mo!

Nope.

Mortgage servicer says only way to remove it is to re-fi. I guess I'm asking how common this is; if I would have been successful in somehow negotiating out of that clause; and if I have ay options to remove PMI at all? I'm just so deflated! Forever PMI? Ugh!

I know it sucks but FHA does require MI for the life of the loan unless you put 10% or more down and then it drops to 11 years. A couple of thoughts about your situation.

1) Statistically speaking most people stay in their home/mortgage for 5-7 years so you're right at the end of that range. It doesn't sound like you have plans to sell anytime soon, right?

2) The FHA MI you're paying is going down every year based on the principle balance.

3) You could look into a cash-out refi to see if rolling in other debt helps it make sense to refinance. For example, I just had a client refinance out of a VA 30 year fixed loan at a ridiculously low rate &, even though their rate went up, they're saving over $2,100 per month thanks to the debts we paid off.

You obviously want to go from an FHA loan to conventional to avoid the MI. That saves you $150 per month right out of the gate but it will probably be offset by the closing costs and the increased rate. That's where rolling in other debt could really make the difference.

0 Votes

Milwaukee, Wisconsin

Quote from @Taylor Johnson:

Hello, I'm currently looking at purchasing a property that has two separate buildings, one zoned commercial and one residential. The commercial building looks as if it was used as a music studio and also an apartment. I'm wondering if this would qualify for conventional financing, or I would be looking at commercial loans only. Most examples I could find involve a single dwelling with mixed use rather than two separate buildings. My lender seems a little iffyy, I'm not sure if how I describe my intended use of the property will influence if they give me a loan. If any has any experience with this, it would be appreciated. Thanks in advance.

Fannie Mae & Freddie Mac are out because they both require mixed use properties to be a one unit dwelling. FHA maybe an option.

0 Votes

Quote from @David M.:

@Joseph O'Sullivan

Don't forget that the tsp repayment will be counted against your DTI when looking at conforming loans.

This is not true for conforming/conventional, FHA, VA or USDA loans.
https://selling-guide.fanniemae.com/Underwriting-Borrowers/L...
Loans Secured by Financial Assets

When a borrower uses their financial assets—life insurance policies, 401(k) accounts, individual retirement accounts, certificates of deposit, stocks, bonds, etc.—as security for a loan, the borrower has a contingent liability.

The lender is not required to include this contingent liability as part of the borrower’s recurring monthly debt obligations provided the lender obtains a copy of the applicable loan instrument that shows the borrower’s financial asset as collateral for the loan. If the borrower intends to use the same asset to satisfy financial reserve requirements, the lender must reduce the value of the asset (the account balance, in most cases) by the proceeds from the secured loan and any related fees to determine whether the borrower has sufficient reserves.

Note: Payment on any debt secured by virtual currency is an exception to the above policy and must be included when calculating the debt-to-income ratio.

1 Vote

Quote from @Mike Gratzmiller:

looking for advice on Points buy down... Loan of $162,000 (SFH) is currently at 6.275. I'm being told I have the option to buy it down to 5.75. How many points would that be? Do you think it's worth the $$ to do so... approx $3,150 to make that move.

Appreciate any and all advice... I'm a first time buyer.

Here's what I show my clients to help them decide if buying down the rate makes sense.
In your scenario, the difference in your PI payment @ 6.275 and 5.75 is $54.71. Your cost is $3,150 so your break even point is $3,150/$54.71 = 57.57 months or just under 5 years.

4 Votes

Pittsburgh, Pennsylvania

All Forum Posts by: John Burke

John Burke has started 0 posts and replied 79 times.

Post: Financing for Modular Duplex on land I already own

Post: Boston - Advice on mortgage types for owner occupied 2-4 family

Post: How does the financial side work when house hacking out of state with an FHA loan?

Post: Finding a lender as a travel healthcare worker

Post: Negotiating Closing Costs

Post: PMI for the life of the loan? No options?

Post: Mixed use property with a conventional loan

Post: TSP Loans - Current Pros and Cons

Post: Buying Points Down

John Burke has started 0 posts and replied 79 times.

Biggerpockets Logo Post: Financing for Modular Duplex on land I already own

Biggerpockets Logo Post: Boston - Advice on mortgage types for owner occupied 2-4 family

Biggerpockets Logo Post: How does the financial side work when house hacking out of state with an FHA loan?

Biggerpockets Logo Post: Finding a lender as a travel healthcare worker

Biggerpockets Logo Post: Negotiating Closing Costs

Biggerpockets Logo Post: PMI for the life of the loan? No options?

Biggerpockets Logo Post: Mixed use property with a conventional loan

Biggerpockets Logo Post: TSP Loans - Current Pros and Cons

Biggerpockets Logo Post: Buying Points Down

Post: Financing for Modular Duplex on land I already own

Post: Boston - Advice on mortgage types for owner occupied 2-4 family

Post: How does the financial side work when house hacking out of state with an FHA loan?

Post: Finding a lender as a travel healthcare worker

Post: Negotiating Closing Costs

Post: PMI for the life of the loan? No options?

Post: Mixed use property with a conventional loan

Post: TSP Loans - Current Pros and Cons

Post: Buying Points Down