All Forum Posts by: Michael Cohen

Daniel Gonzalez depends on the lender, but somewhere between 30 and 90 days. However, once the evaluation is done by the underwriter, it's extremely easy to refresh it. Credit reports will have to be rerun after 90 days and updated pay stubs will be requested to ensure nothing has changed but that's it.

@Daniel B Trader - that's awesome; way to go!  Welcome to the BP family!

@Will Pritchett - I didn't mean to suggest renting out a room isn't "house hacking." Only that the better strategy is that instead of applying for a regular residential loan to purchase a single unit property based on your income and then renting out a room to make some income, you purchase a 2-, 3-, or 4-unit property where you qualify based on your income plus expected rental income. This allows you to buy a much larger property than you would qualify for on just your income, building up a stable of rental properties.

@Michael S. - FHA loans do not allow LLCs to be involved, even if there's also an individual. FHA loans do have "due on sale" clauses. It's not usually carried out, but it can be. Talk to an attorney for that.

@Will Pritchett - roommates in a single unit (renting out rooms) is not considered a house hack because FHA loans do not consider "boarder income." So you're making some money, but he idea of house hacking is buying multiple units and having the renter income calculated in as qualifying income so you can have your tenants cover your mortgage.

Hi @Danielle Palleschi-Browne - The part about the business being retained in NY caught my attention.  Can you PM me more details? That doesn't sound right; if the business is continuing to operate and you will continue to claim it on your tax returns, it should still count.

@Conner Franklin  - @James Rodgers is correct; FHA guidelines still require an income stream to support the monthly obligation on the property: principal and interest, mortgage insurance, homeowners insurance, HOA dues (if applicable), and property taxes

@Ned Carey - you are correct; transfer taxes are high in the City as well. Everything is. Every single thing.  :)

Commenting here so I can follow the thread. Would love to know if it's a worthwhile club to join as well. (Or maybe we can start our own 😀)

@Daniel Gonzalez - it's not an absolute hard-and-fast rule as there's a lot of lenders that use these terms interchangeably, but the basic idea is:

• Prequalification - you talk to a lender about your income, assets, and credit profile. Based on that conversation, they tell you how much you'd be qualified for. These truthfully don't carry much value to potential sellers. 
• Preapproval - you supply supporting documentation (pay stubs, w2s, tax returns, bank statements, etc.) and they pull your credit. This is the standard. Most realtors won't take you around to see properties until a loan officer gives you a preapproval.
• Underwriting / Loan Commitment - the "old" method most lenders till use is for the buyer to take their preapproval, work with a realtor to get a ratified contract, get appraisal/title/inspections, send everything to an underwriter (who is the program expert) to make a final "Yes" or "No" on the entire deal.  Upfront underwriting will have an underwriter approve the borrower aspect of the deal (their income and assets) prior to having a subject property lined up. Therefore, it's a Loan Commitment (they're committed to lending to the borrower, not forcing the buyer to commit to using them as a lender) - not many lenders actually do it.