All Forum Posts by: Axel Scaggs

 @Axel Scaggs  You are NOT locked in until you sign the closing documents. Assuming you credit score is 770 that is an awful loan, and you should NOT close with those terms. 

This is conventional? Yeah, you definitely need to get another quote. This would be reasonable for a DSCR with a short PPP and FICO below 700. If this is conventional, the lender fees are ridiculous.

This loan should be somewhere around 7.125 - 7.375 at worst with a decent FICO while going borrower-paid. I could see this quote being realistic if it was lender-paid and you werent having to pay the broker out of pocket. Total loan fees (not including broker commission) should be at or under $2,500; maybe $2,700 at worst. Even below 700 FICO, you should be at or under par at 7.5% on borrower-paid and under 75% LTV, not paying points.

I would certainly recommend shopping that around a bit just to make sure that is best available. Assuming dscr because that would be too much in fees to be allowed on a conventional deal

Quote from @Axel Scaggs:

Quote from @Patrick Roberts:

Couple questions -

What's the rate and remaining life of the $130k first position?

For the closing costs, how much of that was escrows? If you're currently escrowing with the existing first lien, you would be refunded the balance of that escrow account about a month or so after closing on the new loan.

 The original loan rate was high, at 8.75%, new rate is 7.5%. House was purchased in 2017, so restarting it has certainly affected things in that regard. I attached images of the closing costs. 

$10k in Origination is tough, ~3.5 points + lender fee sounds like did the heavy lifting, plus title/prop tax in TX can add up quickly.

As for the numbers, I think its easier to regret not selling in the short term, but the hope is for long-term gains/appreciation. If they can cover your mortgage and you can slowly payoff a 350k property over time, that should give you a good equity position in no time.

Plus, if rates get better that will always help. 30k-40k + Cash-out proceeds should put you in a great spot to snatch up a few of those 30-50k properties to fix up and scale.

I wouldn't be upset, sounds like you are in a good spot.

Couple questions -

What's the rate and remaining life of the $130k first position?

For the closing costs, how much of that was escrows? If you're currently escrowing with the existing first lien, you would be refunded the balance of that escrow account about a month or so after closing on the new loan.

This is such an interesting question. And I don't think it is as clear cut as people are saying. I get a lot of loans every year and the questions depend on the bank the and the loan officer.

Currently I am looking at getting a US based loan on a property that I own in Costa Rica. They are doing their underwriting process. They know that I own a lot of real estate, but they are only asking me questions about properties that I own where the initial debt was was taken out in my own name (qualifying loans or non-DSCR loans) before I transferred them into LLCs. Those are the only properties I need to give a specific accounting for as far as my debt goes. They use the rent payments to offset the debt if I have rented the properties for a couple of years. All the other real estate in my businesses are counted as assets minus the debt liabilities for net worth purposes and the business income that comes to me is counted as part of my personal income. It really depends on the bank and the banker.

The best is to work with a seasoned banker who knows the system well and knows which questions to ask investors and which not to ask investors. Because, for instance, if I am flipping a couple of properties and I am in the middle of the rehab, but it will take a couple of months for them to get finished and sold, I may be paying $4000 on hard money debt payments per month, and if that debt is included in whether or not I will qualify for a refinance, then I may not qualify. Even though those debts are temporary. So my loan officer may direct me to not disclose those properties while applying for the refinance.  

If something is disclosed then it will be counted against you so just ask the loan officer some qualifying questions to see what you need to disclose. Questions such as:

- What type of real estate do you want me to disclose?

- Do you want me to disclose real estate owned in my own name or real estate owned in my businesses too if my businesses qualified for the debt? 

- Do you want me to disclose real estate that I may own if the debt was guanenteed by someone else? Etc.

You both want to make the loan happen so just ask questions and then disclose according to what the loan officer directs you to disclose.  If while asking the questions the loan officer says that the sub to property that you are getting ready to buy would become an issue then just close on the sub to property after you close on your refinance. 

 It would "pop up" because you do not want to commit mortgage fraud. 

What kind of refinance are you doing?