All Forum Posts by: Sam Fickel

1. You need to honor the current lease

2. You need to occupy within 60 days of closing. 

 The underwriter just needed to know that the lease agreements would either expire or were month to month, and that one of the tenants were informed about the purchase. 

If both tenants are 3 months into a 12 month lease, you probably can't go FHA, unless your state has more lenient landlord ing laws.

 If you're trying to get traditional financing, it's not the credit history they look at, as much as credit score. I've done loans for young chaps with 2 credit cards (that reported to all 3 bureaus) and 6 months of history. 

Here's what I recommend. You've probably done this stuff, so just ignore what you've already done:

1. Get a credit card. Use it for gas, and pay it off every time you use it. 

2. Get a shared secured card. Local credit unions let you get a credit card or loan that's backed against your savings account. Since you're not swiping the bank' s money, the rate is ridiculously low (3-4%) and reports to the bureaus just like any other card. 

3. Word of warning with #2 - many credit unions only report to 1 credit Bureau. Make sure you get cards that report to all 3!

4. If you have a car that's paid off, get an auto loan against it. It's literally the same process as buying a car, except you already own it. It's just a collateralized loan. 

5. Wait 6 months, and your score will go up significantly. If you don't have a score to start with, you'll get one within 6 months, and it should be in the 700's.

I hope that helps! 

@Stephanie Caruthers yes, there needs to be either contract renewal, or a written attestation from him and his commander stating that he plans to re-enlist. Otherwise, hell need to get a job lined up with an offer letter and start date and all

@Bruce Woodruff nice! That's really cool

@Ben Magee it's not a lender call, it's an agency call - otherwise, you'll have to go non-qm or do some creative financing to make it happen. It's tough when you don't have a down payment.

And yes, you need 10% down for conventional 2nd homes.

As far as refinancing goes, you don't need to use another loan company unless you're planning to commit occupancy fraud. But if you just want to refi out of a VA loan into a conventional loan to free up your entitlement to purchase your next house with VA, then by all means, go for it. I'm literally doing that myself right now for my current residence that will eventually become a rental. But the same applies - if you refi into a primary residence loan, whether that's va, FHA, or conventional, then you have to promise to live there for 12 months.

If you choose a Conventional non-owner occupied (aka investment) loan though, you're free to leave whenever you want. It's a higher rate and cost, but it doesn't tie you down.

@Stephanie Caruthers a couple points to break down here, since I am a veteran and do a lot of VA loans.

Yes, you have to promise to live there for 12 months, and you're supposed to occupy within 60 days of closing. BUT VA loans have quite a bit of leniency in the the 60-days-to-occupy requirement. It can be up to 12 months, so ask your loan officer if your situation applies.

If you want to BRRRR then you'll have to keep in mind 2 things: appraisal turn times, and appraisal requirements.

For other loan types, the lender will use an Appraisal Management Company to order appraisals. When the AMC send out the bids, Appraisers accept the order and we get feedback that the report is expected to be published by x date. So if it's a long way's out, we know to extend the contract to accommodate a late appraisal. Or not. But at least we know. On VA loans, the VA acts as the AMC and they don't tell lenders when the appraisal will be published. Very frustrating. This makes the close date a potential moving target, because nobody knows when the report will be published until it's published. So if it takes a long time, sorry, but you might close late solely because you're waiting on the appraisal. Or not. Who knows.

Second, the VA (and FHA) have much more strict property requirements. Basically, the house has to be livable and in halfway good condition, so if you're specifically looking for a distressed property to do a major rehab, it definitely won't fly with VA.

@Allen McGlashing not to mention, you probably pay less points for the lower LTV while doing a refi. Cash out, especially multi family, can be very heavy on points at the upper tiers.

@Ben Magee I'm sorry, I just noticed your last sentance. It would be tricky to get a USDA loan while retaining the current home, at least if you're trying to use departure residence income to qualify.

I made a video about this recently.

https://youtu.be/iZ1OMKWfjFg

If he can qualify for both loans without rental income, then you shouldn't have a problem. It only becomes a pain in the butt when you try to use rental income.

Also, I'd have to double check the guidelines but I'm about 87% positive, that you can't have a non-occupant Co-borrower for USDA. So the son couldn't be on the loan with him.

Down payment assistance specifically for senior citizens sounds like age discrimination to me, personally. Just wanted to out that out there, but who knows - I don't know what every lender in the country is doing.

USDA loans are 0% down payment, with excellent mortgage insurance compared to FHA and Conventional (unless you put more than 15% down). There are income restrictions which count the entire household (not just the borrowers) and geographic limits (you can just Google "USDA coverage map" to see if your area is eligible).

Another perk that is unique to USDA is that the financing amount goes off of the appraised value, not the purchase price. So if you buy a house for 200k and it appraises for 205k, you can finance 205k to pay for the closing costs :)

Judging by the fact that you said "nicer, newer place for 200k" I'm guessing you're not in a large metropolitan area, so my guess is that you should be good - but you should definitely check the coverage map to be certain