All Forum Posts by: Larken Ewing

Hey @Larken Ewing, I read through most of the comments and they're not wrong & provide good advice. I'd done both when it comes to traditional financing (conventional loans) & DSCR loans and it really just depends on which route you go with pertaining to "which comes first, the property or the financing"

hopefully this helps!

 Hi @Larken Ewing,

Sounds like this would be your first deal or so. 

Here are the (general) steps

1. You speak to a mortgage lender (mortgage broker) and you tell them what you think your credit score is, what you believe your debt to income is, and what your monthly income is. Based off that info, they will give you a Pre Qualification that says you are Pre Qualified to purchase a property around $____ amount. NOTE credit has not been pulled yet to verify what you told them.

2. You get with a realtor, someone a trusted friend recommended to you, and tell them that you are looking to purchase a house or duplex or whatever you want to buy and you have been Pre Qualified for $___ amount. That realtor should begin the home search for you and set you with with some homes that you like in the area and whatever criteria you tell them.. IE. 4 bed 2 bath more than 2,000 SQFT with a pool. 

3. Based on the search that the agent sent you, you begin to see some homes you like and let your agent know that you would like to potentially see some homes. At this step is when you should reach back out to your lender and ask to formally be Pre Approved. This is when they will actually pull your credit and the lender will truly verify that you do have a ____ credit score & you do have ____ debt to income and you do make $____ per month

4. After a day or two you should receive a Pre Approval letter stating you are good to go and can purchase a house up to $_____ amount. 

5. You and your agent go shopping and begin to submit offers on homes. 

6. Your contract gets accepted and now you are officially under contract. In Texas you have 72 hours to submit Earnest money (1% of the house value) + option/inspection fee (about $50/day). During option/inspection period (how ever many days you want) is when you do all your inspections. If for whatever reason you don't like anything about the property you can back out of the deal and you will receive you earnest money back but you will forfeit the option/inspection fee. 

7.Right before option/inspection period end you and your agent decide what to negotiate on. Asking for repairs? asking for $$$ off the purchase price? Ect...

8. After negotiations are finalized you then have the appraisal hurdle to clear. If you purchased the property for $400K but it only appraises for $390K then the bank will only loan on the $390K and you have to come up with the difference of $10K or ask the seller to help chip in. NOTE this is only with conventional offers. FHA & VA - the purchase price has to be the new appraised value in Texas

9. Once you are over the appraisal period you should be days away from closing. Don't make any large $500+ purchases or open any new lines of credit for anything at this time. You will jeopardize losing the deal because your debt to income will increase. 

10. You close and move in!

Hope that helps :)

It Depends. If you go the traditional route, you contact a lender and see what you qualify for and then go looking at houses. If you use creative financing, you find a house that is a "deal" and work with someone more experienced who has tehe money to close the deal. Your choice.

It really depends on the type of loan. If it's an asset based loan (DSCR or Hard Money), Lenders will qualify you based on rental income, experience, fico, and ARV.

If it's a conventional loan, lenders will qualify you based on your ability to repay. They will look at your last 2 years of tax returns, recent income statements, credit, and monthly debts. 

If you are looking to go Conventional, I would recommend getting Pre-Approved before submitting any offers. 

If it is a DSCR/Hard Money loan, you just need to locate the property and provide the lender with details regarding the property, your credit score, and experience level.