All Forum Posts by: Derek Brickley

Hey Erin!

Similar to what others have said, it is definitely a possibility as a first-time homebuyer.  We would need to verify primary residence payment history (so if you're renting we would get that). 

Brittany is 100% right. "Par" pricing would be your interest rate without paying points, however in today's market with a conventional investment loan we aren't seeing par pricing. Now you may be able to find options with less points, but the only way you may be able to avoid those is by going with a DSCR option. These will have a higher rate, but since it isn't under the same guidelines as conventional you may find par (or closer to par) pricing on that. If possible, conventional might still be the best route but it would depend on your goals!

Hey Michelle,

A couple notes on that...
1. First I understand what they are referring to, but it sounds like they may not understand the dynamics of investment properties and this specific kind of financing. When it comes to investment properties you will have higher rates/fees than a primary residence regardless whether that is conventional or DSCR. In that realm of mortgages, there is a restriction on pricing being compliant, and that is typically 3 points in total that can be charged to a buyer. However right now even the highest rates we can offer you for an investment are still carrying points. However with an investment specifically you could charge 4 points and be alright compliantly depending on the other fees since there are other factors at play.

2. I'm not sure where they might have been looking but 4 points seems a bit high based on what you just mentioned above.  I want to make clear when I say for this I am estimating $200,000 price, 20% down and a 740 Credit Score but we would be looking at 3 points right now with that.  There may be community lending programs available depending on the location of the property as well.  I'm not sure where that broker may have been looking, but I'd encourage you to make sure they understand the dynamics of investment financing and some of those incentives.  If it might help to look at those as possible options, feel free to reach out

If you're looking at a conventional 5% down, that would probably be a fair quote. As far as FHA 3.5% down 7.75% seems high. If it might help to look at options, feel free to reach out

Hey Benjamin, not sure exactly what you're looking for since there isn't a ton of context.  Feel free to reach out if you might be looking for options.

Hey Brian! Do you have a mortgage on your current home? Reason I ask is you can only have one FHA mortgage at a time. Generally there are very few grants/down payment assistance options for those who are buying multifamily homes. I'm not familiar with what Cambridge might offer, but finding something without MI would only be small/local banks or credit unions like that with some portfolio product. The only down payment assistance for a duplex would be with an FHA loan. At that point, we can cover the 3.5% down payment for 100% financing. That would not work for a 3-4 unit home though.

Hey Johnny!  

I'm not sure who you're working with but the fact they are showing you their par pricing is actually a great sign.  I closed on a househack in December at 8.625%.  The main difference right now that you would see between a primary and an investment property is the fees.  You would probably have the same rate on an investment, but you would be paying 2-4 points for that.  

You can always consider buying down the rate, but the reason we don't recommend it right now (and the reason I didn't in December) is because your recoup period on paying points in generally 3-4 years right now. Of course we don't know the exact time it will take rates to drop, but the expected time frame is 6-12 months.  It never hurts to get other quotes for you as a buyer though.  If you feel like a broker might be helpful, just be sure to take note of how much the broker fees will cost you.

That's good, so then you would have a few options potentially. Depending on your situation, it may or may not be better to go one way or the other (FHA v. Conventional).

Hey Dante! Sounds like you already have one househack? If so, do you have an FHA loan on that property? Would need to know a bit more about your situation and what you might actually be looking for to see if we might be able to help. I more or less used myself for my househack and investments and I'd like to think it has all worked out well

Hey Tom! As mentioned above, the foreclosure wouldn't be an issue in itself. The work history would be the main reason for not getting an approval conventional. You could look at those NQM type loans like bank statement programs that only look at 12 months, but even those will have higher rates/fees than a conventional might. Just from what you've said here, you may want to explore a DSCR investment loan. This way, a lender won't be looking or asking any income questions, it would just come down to what income the property would bring in. Rates are higher than a conventional investment, but in some cases you may find these have lower fees since a DSCR lender isn't controlled by Fannie/Freddie loan level pricing adjustments.