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All Forum Posts by: Patrick Roberts

Patrick Roberts has started 4 posts and replied 567 times.

Post: Making a mistake with a cash-out refinance?

Patrick Roberts
#2 Private Lending & Conventional Mortgage Advice Contributor
Posted
  • Lender
  • Charleston, SC
  • Posts 580
  • Votes 432
Quote from @Jay Hurst:
Quote from @Axel Scaggs:
Quote from @Patrick Roberts:
Quote from @Axel Scaggs:
Quote from @Alan Lacey:

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

It is a conventional cash-out refinance on an investment property I own. My W-2 was required to meet dti.

I actually went through a broker recommended here by several people on BP. 

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 appreciate the the feedback. My FICO is a 770 and the LTV I believe was over 75%. It’s unfortunate, but I guess I learned the importance of shopping around as I only talked with one other lender. If I’m locked into this, I’ll just be much more careful in the future.

 @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. 


 Agree

Post: Do I have to physically live in a Property purchases with a FHA Loan

Patrick Roberts
#2 Private Lending & Conventional Mortgage Advice Contributor
Posted
  • Lender
  • Charleston, SC
  • Posts 580
  • Votes 432

Absolutely cannot do this. You will have to occupy the property as your primary residence, meaning you physically reside there for the majority of the year. The rule of thumb is that you need to do this for at least a year before converting the entire property to a rental. The actual guidelines dont mandate one full year, but in the scenario you're describing, it would need to be your primary residence for at least one year. 

Also, why FHA?

Post: Making a mistake with a cash-out refinance?

Patrick Roberts
#2 Private Lending & Conventional Mortgage Advice Contributor
Posted
  • Lender
  • Charleston, SC
  • Posts 580
  • Votes 432
Quote from @Axel Scaggs:
Quote from @Alan Lacey:

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

It is a conventional cash-out refinance on an investment property I own. My W-2 was required to meet dti.

I actually went through a broker recommended here by several people on BP. 

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.

Post: Making a mistake with a cash-out refinance?

Patrick Roberts
#2 Private Lending & Conventional Mortgage Advice Contributor
Posted
  • Lender
  • Charleston, SC
  • Posts 580
  • Votes 432

Depending on the PPP and the FICO score, box A might be reasonable or it might be high - Im leaning toward high. I would ask for a rate near par to see what the breakeven period is on the points. At the very least, see if the breakeven approximately matches the PPP. I dont lend in TX, but box C looks high as well compared to what I regularly see; this could be state specific, though. 

Post: Making a mistake with a cash-out refinance?

Patrick Roberts
#2 Private Lending & Conventional Mortgage Advice Contributor
Posted
  • Lender
  • Charleston, SC
  • Posts 580
  • Votes 432

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.

Post: Commercial 5-year ARM's - Please tell me there is a better way!

Patrick Roberts
#2 Private Lending & Conventional Mortgage Advice Contributor
Posted
  • Lender
  • Charleston, SC
  • Posts 580
  • Votes 432

This is the trap of low ARV properties that I was discussing in a different forum the other day. Financing is difficult to find when the loan amount is under $100k. There are some DSCR lenders who will fund loan amounts of $75k, but you'll likely need ARVs around $100k to make those work. If youre trying to get a portfolio (blanket) loan on these, that will likely be even harder.

What youre currently being offered are true commercial loans - they rarely have tenors longer than 5-7 years. Might be as good as it gets. Maybe some other lenders familiar with the Michigan area have some other ideas. 

Another thing to check into early on is title insurance - many title companies wont issue policies for properties that are obtained via tax foreclosure. Id ask about this up front before you pay for appraisals and everything else to find out a week before closing that they cant lend because of title issues. 

Post: Looks like great place for investment. Am I missing something!?

Patrick Roberts
#2 Private Lending & Conventional Mortgage Advice Contributor
Posted
  • Lender
  • Charleston, SC
  • Posts 580
  • Votes 432

6% for property taxes is the assessment ratio, not the tax amount. Richland county has a tax estimator that works fairly well, but youll need to know the tax district that the target property is in. The assessment ratio gives you the assessed value, which is what the millage and other variable taxes are based on. 

Overall, though, I'm bullish on Columbia for the long run. 

Even without tax returns, there are a ton of program like CLEAR, CoreLogic, DataTree, etc, that are used to find undisclosed debts and properties. 

Post: STR in Charleston/North Charleston

Patrick Roberts
#2 Private Lending & Conventional Mortgage Advice Contributor
Posted
  • Lender
  • Charleston, SC
  • Posts 580
  • Votes 432
Quote from @Rob Cassagne:

@Patrick Roberts thank you, I really appreciate the insight. I'll touch base with Mike and Dan.


 Sure thing. Let me know I can help with financing. 

Post: Foreclosures Over 1,000,000 loans in default? Time 2 Learn How To Buy Preforelosures?

Patrick Roberts
#2 Private Lending & Conventional Mortgage Advice Contributor
Posted
  • Lender
  • Charleston, SC
  • Posts 580
  • Votes 432

Yes, there are approx that loans that should be in foreclosure, but theyre not, and in my opinion, are unlikely to be. If you look into the data, you'll see that something like 500k of these are 90+ delinquent, but the average days delinquent is over 500. These loans have been sitting in limbo for years, and my guess is that it's unlikely they ever make it to foreclosure. There are so many programs for homeowners to mod, access forbearance, etc, to keep them in the homes that I doubt these are resolved anytime soon. 

On the other hand, I think investment loans are something to watch for forced selling. A lot of DSCR loans being made right now are on the fringe of solvency, and I expect more pressure in this market segment as operating costs continue to rise and rents continue to stagnate over the next couple years.