All Forum Posts by: Derek Brickley

Hey Leah!  Depends on your exact situation, but I'd first recommend an all-in-one refinance.  Not an uncommon situation, and depending on the exact details there are still some community lending incentives you could have as a first-time borrower to help with the costs.  Would need to know a bit more to say for sure, but be sure to ask about those benefits you might qualify for.

Hey Mateusz! I would be cautious on looking in the lower end of that range. You'll notice a significant increase on your rates/fees as that loan amount lowers. Keeping your loan amount above $100k will have better terms, above $75k loan amount will be possible but slightly higher rates, and then below $75k loan amount most DSCR lenders will be unable to do. The most common we are working with and the ideal situation is something between $125k and $140k at 60LTV. One of the investors we are working with has a score around 680 but is looking at high 6's with a one year prepayment penalty. Happy to go through some of those options if that would be helpful for you.

Hey Matthew, generically yes.  If you bought down the rate it would take longer for the market to improve enough to make refinancing worth it for you.  Hard to know exactly for you depends on a number of factors.

Yes exactly right.  Now if there is a justified reason for moving (increased family size, job relocation, etc.) then that makes sense for buying a new primary after the fact.  Otherwise, some time would need to pass, generally 12 months, but that is not a hard set guideline.  

I know the national "average" for a conventional is around 6.25% right now... but that doesn't take into account paying points to buy down the rate or your specific situation.  To make refinancing out of 6.75% worth it without paying points the market isn't quite there yet.  With how soon your new construction will be finished, I wouldn't recommend risking that over trying to get .5% better in rate (probably would end up paying points for that too). 

Happy to discuss what refinancing that as an investment property would look like for you or showing more detail on the numbers either way!

Hey Guy!

Pretty standard, there are a few DSCR options for short term rentals. Hard to say what that would look like for you specifically, but feel free to reach out if we might be able to help.

Hey Stephanie!

You can do both at the same time, but you wouldn't be able to do it both as a primary residence.  Once you buy another home as a primary residence, you would need to refinance the current home as an investment which would have higher rates.  Depending on your time frame, refinancing the current home first as a primary residence and waiting to buy another primary residence would be the way to get the best terms.  If it's more important to get another home first, then go ahead and do that.  Just know the refinance will need to be done as an investment if done after the fact.

Hey Clare!  

Not in VA, but maybe similar to your strategy we have helped investors out of state invest in the area. Depending on your first conventional loan, there are a few options for a househack that I have used for my portfolio. FHA has significantly stricter guidelines for departing residence income to help offset that, so conventional may be easier to accomplish. Note that this would be with a 12 month lease in place for the vacating property either way and you would need an appraisal done on that property. Although the rent-by-the-room will probably have higher rents, if the rent-by-the-room income is not on your taxes then that amount wouldn't able to be used. This all depends on your exact situation and the properties you're looking at, so feel free to reach out!

Hey Bruce!

Being as transparent as I can with this, there is a huge benefit to the Homelight Program and we have used it before to help people looking to get into a new home.  With this, as a lender we can exclude any payments for the current home to help increase your borrowing power for a new home.  You don't make payments on this, and there is no interest accrued.  If for some reason you can't/don't sell the home within the timeframe after you close on the new home they will buy the home for a preagreed upon amount, then try to resell the home.  Any profit made from them reselling the home comes back to you directly.

Here is the reason that this program does not fit most people.  The charge for doing so can definitely cut into your equity as it can be 10's of thousands depending on the estimated value of the home.  Depending on your equity position, you may not be able to access as much as you need/want to actually find another home. 

So my personal take: If you feel like having a non-contingent offer will allow you to be more competitive and save $10k+ on the new home because of a bidding war/multi-offer situation, then it may make sense.  If your market isn't as hot right now or if you don't have significant equity in the home, then chances are you may be better off submitting a contingent offer and relying on the market.  Happy to go into more detail with you on how we do this, so feel free to reach out with any questions.

Although not too far off, seems a bit high.  It wouldn't be too much in savings, maybe only a $1,000 or so based on what we are seeing.  I'm assuming this is a conventional investment property loan though? Depends on a number of factors so hard to say for sure.  Feel free to reach out though if you'd like another look, certain areas have decreased rates for investors based on the area and price so might be eligible.

Hi Luke!

Generically, if you aren't living there currently, the terms on an equity line will be atrocious. If you need to access some of the equity, a conventional cash-out refinance will have the best terms. If that doesn't work, then a DSCR cash-out would be a good alternative. Then you could look at getting another property with a conventional or DSCR loan.

Note: Conventional will always have better terms, but will require more steps/verifications/paperwork. Typically it is better to get as many conventional loans as you can first before entering the DSCR space.

For rate cuts - the Fed lowered .5% on their overnight rate!  So short-term equity lines, credit cards, etc. will start to feel that.  Mortgages and other long term debt has not been impacted.  For long term rates, the markets have already priced in 1% of cuts this year and 1% of cuts next year, so we will still see them taper down but there will not be a fall-off like a lot of us might hope.  

Strategy: Agreed if you can get away with only getting lending on one property that will cut costs, but if you need to in order to scale then may be a cost of doing business.  Understanding your numbers first will be important to see if that makes sense or not.

Feel free to reach out if we might be able to help with anything here.