All Forum Posts by: Patrick Roberts

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

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.

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. 

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

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. 

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. 

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. 

 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. 

 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. 

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.