All Forum Posts by: Josh Matteson

 @Andrew Postell a friend of mine works for the lender. He isn't too happy either and referred me to other lenders if there were better options for me. With less than 3 weeks to go and a good chunk of earnest money down, wasn't sure if shopping is feasible at this point.

this property is owner-occupied.  

I'm currently locked into a rate in a new home mortgage. Today I was notified that they are no longer going to honor the rate because they are no longer going to honor the program that I was enrolled in. My rate jumped nearly .5% because of this and now I have no time to find a different loan. They are claiming that they will honor the standard rate from the time that I locked. However, that rate is .5% higher than any other loan I was approved for at the time. It feels highly unethical that they basically yanked the rug out from underneath me and put me in a position where I have no other choice. Any advice on how to move forward?

Hello BP Community, I need some guidance. 

I recently came on here and asked the age-old sell or rent out my current home on a low-interest rate question. Based on the responses, I took out a HELOC and we put a down payment on a different home. We have decided to rent out our current home, but with a twist.

Some friends of ours offered to buy some of the equity in our home and go into business together. The concept sounded great, as we could cash out some of the equity and split the costs of the rental 50/50. Now we are just trying to figure out how it would all work. Here are a couple of options that I have thought of, but I don't know all of the implications of each. The goal is to obviously keep my current mortgage with the low rate and figure out a way to fairly split the equity in the home. 

- Move the property to an LLC that we have co-ownership of. I spoke with our mortgage company and they said that some loans can be moved, but the ownership of the LLC has to be at least 51/49%

- Some type of co-ownership agreement that gives them ownership of the equity when it sells?

I have just over $100K equity in the house. The idea is that they will purchase a % of that equity based on the appraisal of the home, then we will split the costs/cash flow based on that % ownership. Our mortgage is around $1400 and we already have interested renters at $2550. 

1) Are there any options other than the 2 I mentioned above?

2) What are the tax implications for me on the gain? The idea is that we will use that to just pay off the heloc we used for the next house. 

Thank you! 

 Hey Milton, 
Thanks for the response! I've been pushing a house hack, but I think she is out on the idea at this time with a 7 month baby in the fold.

We are actually looking even further south in Olathe/Gardner. Things seem to be ranging anywhere from 290-350 out there! 

Also, let me see if I can clear up those numbers. $1450 is our current mortgage, + the potential $750 cashflow if we rent it out for $2200. The new mortgage might be around $2500 (which is a conservative estimate based on recent preapproval estimates) and the $200 is another conservative estimate on the interest-only heloc payment. I would use the cash flow and additional savings rate to quickly pay down that heloc (likely in 18 months or less). 

 Hey Lawrence, 
Somewhat new to this.. are you looking for numbers other than what I already shared earlier today? Thanks! 

Thank you all! Here is a little breakdown of the numbers:

This example is located in the Kansas City Metro (specifically Overland Park). 

- The current house is a monthly payment of $1450 at 3.375%. Heloc on this was approved at 10.49%. The 3bd/3br home in my area is currently renting for around $2200. The home valuation came in at $303K in Dec 2022 and currently owe $217K on the loan. 

- Hypothetical "next house" was recently preapproved at 5.99% and the payment would amount to around $2400-$2600, depending on the overall purchase price of the home we find. Meaning we would probably add around $1000/month on the personal mortgage. DP in this example would be the minimum 3.5% of a potential $325-$350K home. So, for sake of the example, let's say 15K on the heloc. 

The rental income alone isn't enough to offset the change in the mortgage, but we would reallocate current savings and rental income to pay off that HELOC as quickly as possible.

Payment now -- $1450 + $750 hypothetical rental income
Payment with new mortgage -- $2500 + HELOC payment (conservatively estimated) $200+additional principal 

Hello BP,

I’m deciding between 2 options and would love some guidance. 

Our family just grew and we are looking to get into a new home. Our current mortgage has built up quite a bit of equity over the last few years and trying to figure out the best course forward. My goal is to own 2 rental properties this year, but also want to be wise with how I get there. 

Option 1: Keep current house with low interest rate and use a heloc for a DP on the new property and keep the current one for a rental.

Option 2: Sell the current house and use that for a down payment and finish paying off some low interest debt, then save up for a rental. 

Any advice would be appreciated! 

Trying to unlock the equity in my home without selling or moving.. Got pre-approved for a HELOC and aim to try BRRRR with the equity. Any tips or things to avoid?