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All Forum Posts by: Patrick Roberts

Patrick Roberts has started 4 posts and replied 883 times.

Post: Need Advice on Getting a Loan With a High DTI!

Patrick Roberts
#2 Private Lending & Conventional Mortgage Advice Contributor
Posted
  • Lender
  • Charleston, SC
  • Posts 907
  • Votes 719

FHA is more forgiving than Conventional in high DTI scenarios; arguably, it has the highest DTI threshold of any loan product Im aware of besides a VA loan. A bigger part of the puzzle is how your income in calculated - every loan product has slightly different guidelines, and you may see dramatically different DTIs with different loan types/guidelines.

A couple other tactics for tackling DTI:

- restructuring existing debt

- mortgage credit certificates if available in the state youre buying in

- buying down the rate or increasing the downpayment to reduce the monthly pmt

- bridge loan on the house youre selling

Post: Advice on getting some cash out of my Rental Property (Midwest area)

Patrick Roberts
#2 Private Lending & Conventional Mortgage Advice Contributor
Posted
  • Lender
  • Charleston, SC
  • Posts 907
  • Votes 719

Get a personal loan from your local bank or a 401k loan. It will be cheaper than paying nearly $10k for a refi to walk away from closing with $5k-$10k in hand. There isnt enough equity in this deal to take anything meaningful out. I doubt you'll find any cashout refi's over 75% LTV on this deal. Margins are too tight.

Post: Who sets up an owner financing deal?

Patrick Roberts
#2 Private Lending & Conventional Mortgage Advice Contributor
Posted
  • Lender
  • Charleston, SC
  • Posts 907
  • Votes 719

The terms of the deal (purchase and loan) are negotiated between you and the seller. A specialized attorney can (should) draft the documents for the loan (note, mortgage or deed of trust, etc). A closing attorney/title company will handle the closing and any title insurance policies. 

Typically, the lender drives the bus when it comes to getting the lending docs together - they retain an attorney or consultant to represent them and direct the document creation. In most cases, these costs are paid by the borrower, typically as origination, legal or processing/underwriting fees. Again, all of this is negotiable. 

Post: Invest in a syndication with your employers 401k?

Patrick Roberts
#2 Private Lending & Conventional Mortgage Advice Contributor
Posted
  • Lender
  • Charleston, SC
  • Posts 907
  • Votes 719

This is interesting. How long and invasive was the process behing this?

Post: Sellers Concessions - How can the be used?

Patrick Roberts
#2 Private Lending & Conventional Mortgage Advice Contributor
Posted
  • Lender
  • Charleston, SC
  • Posts 907
  • Votes 719

Depends on the loan type. Some loans require a minimum borrower contribution. Worst case scenario, you will likely be able to apply the unused concessions toward a principal curtailment if you dont want to buy the rate down further. 

Post: Help with a HELOC

Patrick Roberts
#2 Private Lending & Conventional Mortgage Advice Contributor
Posted
  • Lender
  • Charleston, SC
  • Posts 907
  • Votes 719

For 2nd liens, the best lender is typically the one that holds the 1st lien. That being said, I agree with @Nicholas L., if this will be for a long term use of the funds, any 2nd lien is likely to be too expensive to make sense. 

If youre deadset on this, expect rates to be north of 10% on 2nd liens on investment properties. 

Post: HELOC Advise for Debt Consolidation

Patrick Roberts
#2 Private Lending & Conventional Mortgage Advice Contributor
Posted
  • Lender
  • Charleston, SC
  • Posts 907
  • Votes 719

All of the different scores are different scoring models which have different weights for the various aspects of a credit profile. Most mortgage lenders used FICO 2, 4, or 5. FICO 8 is the model you get with apps like Experian or MyFico. Vantage 3.0 or 4.0 are more common for fintech lenders and credit card providers. There's something like 38 or 40 models in existence. It's not uncommon for the models for mortgage rates to be 5%-10% below the others. 

This is not a way for a lender to manipulate a rate. If they wanted to do that, they would just change the pricing matrix and charge more. 

Overall, this isnt a huge change in costs on a $100k loan, especially if its rolling up a bunch of high rate debt and saving you a ton of money. You can shop around if you want, but relationships are extremely valuable when it comes to lending. If you have a good relationship with this lender, dont burn that over an 1/8th of a point. I doubt youre going to get 7.5% anywhere, as that is WSJ Prime right now and most lenders are going to have some kind of a spread on top of that. I would expect you to land in a range of 7.75-8.25 given what youve provided. 

Something else I would ask is whether they will repull credit and adjust the rate in the near future. Given the wide spread between your highest and lowest scores, my guess is that utilization is pulling down your lower scores. Once you consolidate some of this debt, your scores may rebound over the next year once the new revolver trades seasons with good payment. 

Post: ‘My Credit Doesn’t Matter For a DSCR, Don’t Worry’ This is a MYTH

Patrick Roberts
#2 Private Lending & Conventional Mortgage Advice Contributor
Posted
  • Lender
  • Charleston, SC
  • Posts 907
  • Votes 719
Quote from @Chris Seveney:
Quote from @Jason Wray:

Jada,

When it comes to qualifying for a DSCR loan or any mortgage you must have your credit pulled and a "Soft Pull" just means the loan officer is pulling one (1) of the (3) major bureaus. Some DSCR lenders may allow a single pull or "Soft Pull" at initial application but in 99% of the time Banks and Lenders do a "Hard Pull" or have to pull all 3 bureaus to get into final approval/underwriting.

You have to also have a 680+ or better in order to get 80% purchase and 75% LTV cash out refinance. If you want the lowest rate and best options in financing its wise to get your credit scores above 720+ Anything above 720 in most cases is going to help assure the lowest rate and higher LTV's. Anything below 680 is going to either get denied or a horrible rate if approved at all.

DSCR uses the rents to qualify or "Debt Service" the mortgage payment but credit will always be a factor and the higher the credit score the lower the rate. Lower the score the higher the rates....

There ae (3) Bureaus that get monitired Equifax, TransUnion, & Experian and its important to try and keep all of these bureaus above 720+.   This is also important to get qualfied on credit cards, automobile loans, and all loans/mortgages.  


Agree, DSCR absolutely requires decent credit. most do not go below around 660 - some do but you are going to be in double digit rates once your credit score starts hovering in low 6's or high 5's.


 Yep. And the reality is that someone with a FICO with a 5-handle has no business investing - they should be getting their personal finances in order. 

Post: Filing Lis Pendens - What are my options?

Patrick Roberts
#2 Private Lending & Conventional Mortgage Advice Contributor
Posted
  • Lender
  • Charleston, SC
  • Posts 907
  • Votes 719
Quote from @Jay Hinrichs:
Quote from @Andrew Merritt:

@Chris Seveney The property is owned 50/50 between an LLC that she's in and her late husband, who died >10 years ago. She lives in Florida.

She's filed the ancillary docs in SC (was not done until after closing was supposed to happen) but my attorney said that she'll need to be appointed the PR here in SC locally and do a deed of distribution from Clarence to the heirs.

The property also needs a survey/recorded plat, may need quiet title as the plat that she has was not recorded and doesn't reflect the current tax map on the GIS.  There are several lots on the current GIS map that are not shown on the one that she has and it looks like it will be complicated to get everything resolved.

For what it's worth, my attorney has said that he doesn't think this is going to be fruitful.  

I'd be OK w/ dropping this, but the seller said that she's already working w/ another buyer that didn't find the title issues that my attorney did.  That part of me just doesn't want to give it up just in case it is sellable.  


she is not telling the truth or the other buyer is a bozo.. but as Chris mentioned it can be sold it just comes with all the warts in place. A lot of this stuff there in Charleston area since it is one of the oldest states and such. I look at leaners in downtown Charleston that have sat for years you cant take them down because of BAR restrictions but you cant clear title either so they just sit there until they fall or burn.

 Yup. Demolition by decay. Downtown CHS is some of the most expensive real estate in the country, yet there are abandoned and derelict houses on literally every street. 

Post: DSCR loan AND loan for Down Payment?

Patrick Roberts
#2 Private Lending & Conventional Mortgage Advice Contributor
Posted
  • Lender
  • Charleston, SC
  • Posts 907
  • Votes 719

You will not be able to borrow the downpayment unless it's coming from a separate loan against the equity in another asset (such as a cashout refi on another property). Absolute max LTV for 99% of DSCR programs is 85% (15% down). 20% down is much more realistic if you want decent terms.