All Forum Posts by: Account Closed

What's the price point? How much of a down payment are you able to make? 

I would not do this refinance and I am a lender and investor. You're paying $12k in closing costs on a $220k loan or 5.5% upfront!

Your current annual interest payment is ~$10k

Your projected annual interest payment at the lower rate would be ~$7k

It will take you almost 4 years ($12k closing costs / $3k savings) to break even and start realizing the savings. 

Just wait until the lending markets stabilize a bit and I would bet you won't have to pay 2.25% in points to get this rate.  

What loan size are you looking for? That will also dictate the type of lenders that would be best suited for this deal. 

Are you sure your coop will allow you to go up to a 90LTV? They will have to approve the financing whether it be a primary loan or a HELOC, so you need to clear this first. If the coop is ok with it, I would be happy to research some options for you.

It's an interesting idea. What's your motivation for this?  A few things to consider:

You may not cash flow very well on the two rental properties once you increase the debt on them...but on the other hand, you should be able to write off all of the mortgage interest against the income from the two rentals.

The mortgage rates you'll get will be higher on the rentals than they would be on your primary residence. 

Happy to discuss this with you further on the phone if you'd like.  My background is in financing so I can speak to those options as well.  

PM me if you'd like some more info on lenders that will let you refi up to 75% of your investment properties on an individual basis.  Cross collateralizing a loan against a portfolio will severely limit your flexibility going forward. If you want to sell one of the properties, you'll have to restructure or refi the whole loan. 

Yeah, this should not be an issue at all. HELOC funds can be used immediately for a down payment. My bank has no issue with this. PM me if you want to discuss the scenario further.

Michael Bensimon

NMLS 9224

I am a NY based lender and 60% of my business is comprised of coops.  As a previous poster mentions, credit unions can be very difficult with underwriting coops.  Send me a private message if you would like to discuss further.  There are many options out there for 90% financing if that is what you are looking for. 

You can't use your parent's HELOC as funds for a down payment on an investment property. The funds would have to be considered a gift, and they would need to sign a letter stating as much.

And unfortunately, you can't use gift money to buy an investment property.  

You can get around this by putting your parent's on the mortgage with you. The funds would no longer be considered a gift, and would be allowed for the down payment. 

@Krystof Pilisiewicz  The gap between people who like the deal vs don't comes down to adding in appreciation to your total return.  You're trading low cash flow/returns in places like NYC for future appreciation.  That's where the returns come from. 

I'm a lender and can tell you that 3.5% on an FHA loan like this is not going to happen. It will probably be closer to 4% plus the 1% mortgage insurance, so I would use 5% as your rate. Also, the FHA mortgage insurance is for the life of the loan. You'll need to refinance in order to get rid of it.