All Forum Posts by: Jesse Hinaman

@Blake Furtick a lot of lenders will have “overlays”, which are lender specific requirements above and beyond Fannie and Freddie guidelines. Following the guidelines, you cannot have more than 10 “Financed” properties.

However, with COVID, I’ve seen more lenders institute a max of 4 financed property overlay. Eat to work with a Independent Broker that has access to numerous wholesale lenders across the country. Best part, is they do the searching and investigating for you -free of charge- helping you avoid all those annoying sleazy sales calls from different loan offers blowing smoke up your butt and avoiding costly mistake for using wrong lender for your specific circumstance.

If it cost you less to use a CPA than TurboTax, would you still use TurboTax? Talk to a professional who has a fiduciary duty to you. They’ll educate you, give you best advice, and take care of all the hard work.

@Angel Garibay Hi Angel! I know Plumas Lake very well. Haven for Beale AFB renters. With conventional rates as low as they are and discounted mortgage insurance premium if decent credit score, you’ll probably see a substantial drop in the monthly payment.

Worth running a savings analysis. Let me know if interested in seeing side-by-side comparison?

@Tomas Saenz you mention purchasing your 2nd property? That would disqualify you as 1st time home buyer, and you would not be able to use Down Payment Assistance (DPA).

Like the Montes goes, nothing in life is free. You pay for the DPAs in high origination costs (that are subsidized into your loan giving you negative equity stance 104% LTV), and higher interest rate - costing you thousands over just a few years.

Better option is 401k loan or gift funds from relative or close friend. A 60% return on the use of those 401k funds vs. the likely 5% return on your retirement Target Fund is much smarter investment.

For example, $10,000 loan to buy $200k property. Appreciates 3% in first year = $6,000, that’s $6,000 return / on $10,000 loan = 60%

$10,000 x 5% annual mutual fund return = $500

@Dale Miller

Better option would be cash-out refi when you go into contract. You can write offer as all-cash and 15 day close.

I do this all the time with my clients that have large chunks of equity in other properties. Complete the refi in 15 days, rolling the proceeds over to purchase escrow. Fixed low rate and payment. Alternatively, you can have simultaneous purchase loan and refi, using cash proceeds as large down on purchase loan getting you phenomenal rate and no cash out of your pocket. Again, offering 15 day close with 10 loan contingency is as good as cash to most sellers.

HELOCs serve there purpose though. If having immediate use for the money, then conventional refi is better choice. If just wanting reserve account/line of credit to tap into just in case, then HELOC works. HELOCs right now are probably around 45-60 turn time, though.

Don't make the mistake of getting a HELOC on your property before doing refinance, since you will get higher rate pricing on the conventional refi with subordinate financing in place. Get the refi done, then apply for the HELOC for your safety line.

@KATHY H. Loan amount has a big part to do with it. Most lenders increase the rate for loan amounts below $125k. This is due to the fact that’s it’s the same amount of work to originate a $90k loan as it is a $500k Loan. Lender takes a loss with dedicating resources to originate that small loan vs higher loan amount -given the high demand for refis, right now.

Regarding closing costs, most lenders fixed expenses (fees, 3rd party costs, government fees) will be between $2500-3500 (depending on lender). Add $900 for 1pt rate charge, and additional costs of about $300-$1k for Prepaid’s (partial month interest, insurance renewal if within 3 months of policy expiration) and New Impound account (reserve for property tax and insurance. Impound account can be waived if you prefer to pay tax/Ins yourself).

We currently have $7 trillion of mortgage debt that would benefit from a refinance in our current rate environment, and with only so many resources available, lenders will start prioritizing cost vs benefit. I hate to see that impact you, but just giving you better explanation of the current lending landscape.

If holding the property long term, it makes more sense to buy down the rate (2-3pts) as the lender can provide better long term value to you, knowing you will not Refi 6 months later.

The best part of “buy-down” points in a refinance is $0 comes out of your pocket, as its rolled into new loan. Plus if you bought down we ought to get loan amount to $100k, could get you much better rate pricing, as well.

A buy-down is just upfront interest paid to the bank and you enjoy a lower payment and higher cash-flow every month. Also, Even though you didn’t pay for the buy-down yourself, the IRS let’s you write off 100% of the points on your 2020 taxes (depending on your tax situation - you could recoup around 35% of the Buydown cost in the form of a tax cash refund).

Think of it like borrowing to make a chunk of Payments upfront so you can enjoy the lower monthly payment, higher cash flow, and big tax deduction saving you $$.

The only negative is the higher loan amount and “advance” you took on the equity; however, I Guarentee you the value of the $ Dollar you took today, will be far more valuable than the dollar you don’t recoup in 15yrs (opportunity cost of your money is better today than the inflationary environment in the future).

@Christopher B.

75% and $300k+ loan amount on investment property at 3.375%.

For 2.99% primary home, 5% equity minimum. High balance ($510k+ loan) will have small buy down. If you have over 20% equity there is a very good chance we can waive appraisal and close in 12 days.

Not available on jumbo ($765k max in high cost areas like Bay and SoCal).

@Tony Thomas Sac has been good to me since moving here in 2002.

I implemented a very successful student housing strategy about 7yrs ago that has proven very profitable, lower risk, and easier to manage than single family or multi-family properties.

Got a small meetup near Folsom area. If anyone’s interested, DM me and we’ll get the next formal in-office meeting on the books...or zoom.

@Cody Kitaura you’ll need 25% down on a 2-unit. If you’d like a payment scenario shoot me a message. I just quoted a duplex refi a few days ago for a colleague at 3.75%.

I also cover your appraisal cost, and $0 processing/admin fee (saves you about $2k in closing costs)

@Curtis Robbins 2.99% primary or 2nd home 30yr fixed, no points (well qualified borrower).

Investment Prop 3.375% with .25pt Buydown

No processing, admin, or appraisal fee. Just wholesale lender UW fee of $1000

@Dwight Porter

To make my VA clients offer stand out, we write aggressive close timelines (14-17 days) and short loan contingency period (10 days).

I have a direct call with the listing agent after offer submitted. Explaining our operations, weekly communications, and speed at which we operate with 100% confidence in always hitting that mark, and they reiterate that to the seller.

Secondly, lender is allowed to cover closing costs that VA doesn't allow buyer to pay, which I also explain to listing agent providing more reassurance for seller, when explained properly.

Last resort is have agent include language in your offer that caps the Max $ dollar amount of repairs you can contractually ask for. Ie. “Cost of repairs paid for by seller not to exceed $2,000”. This would put you in bind, if $5k in repairs needed; however, more reassurance to seller, and now you have the opportunity to be creative (work with lender to get credits to cover the $3k of additional repair costs).