All Forum Posts by: Stephanie Medellin

That's correct - your DTI will include the new mortgage payment that you're applying for. The lender has to make sure you can afford the new home along with your existing monthly payments. FHA loans are for primary residences only, and you'll need to certify that you intend to live there for at least a year. Rental income won't be a consideration right now unless it's a 2 to 4 unit property.

If you turn it into a rental at some point in the future and buy a new primary residence, you should be able to use a portion of the rental income to help qualify for a new home at that point.  Of course, this depends on loan guidelines at that time, the type of loan you use, and your finances in the future.

I have 2 options for investment HELOCs on California properties.  If your property is in another state, a mortgage broker in your state is likely to have some options for you.

@William C.  

For rentals not yet showing on your tax returns (like your Nevada property), many lenders will use 75% of the monthly rent to offset your PITI. You may need to show receipt of a few months rent along with the lease. If it's a very new lease, you'd provide copies of the security deposit and first month's rent with proof of deposit.

For rental income reported on your schedule E, a different calculation will be used.

Your current primary residence can also be converted to a rental.  You will need a signed lease and first month's rent and security deposit, but you should be able to use 75% of the monthly rent.  

While some lenders could have stricter guidelines when it comes to length of rental income history, these are the standard conventional guidelines that most lenders follow.

5-10 units is considered commercial, and will generally require 20% or more as a down payment.  You should also ask the lender if they will permit you to owner occupy the property, since many commercial loans are not designed to be "consumer loans."

If the funds are coming from an acceptable source, they don't necessarily need to be seasoned in your account for any length of time.

The cost is quite high considering your scenario, however, that's based on a shorter rate lock period.  Not all lenders will lock for an extended period of time.  If this quote gives you the option to lock your rate until the expected closing this fall, the long lock could be contributing to the high cost.  

Not all lenders have pricing adjustments for 5-10 properties, and as mentioned already, it wouldn't be a large cost.  It's built into the interest rate so you really wouldn't even be aware of it, and a lender that has this adjustment could still be cheaper overall compared to lenders that don't.

There are so many other factors that could have made the loans more expensive, from market conditions, higher LTV, change in credit score, change in lender, property type, etc.

HELOCs and HELOANs are available on investment properties. The (LTV) percentage you can borrow is lower than a primary residence loan, but still available.

@Joshua Thang  Appraisal transfers are definitely possible depending on who ordered it and if it meets compliance requirements, but I've never heard of a lender accepting someone else's credit report.  Lenders typically monitor your credit through closing, and they wouldn't be able to do that with a copy of a report ordered by someone else.  If there aren't significant changes to your credit over the past month, it shouldn't cause a problem to pull a new report.

This is possible on conventional loans if the lease term has at least 5 years remaining at the end of the mortgage term (i.e. a 25 year mortgage would need at least 30 years remaining on the lease), among other requirements for the lease.  Happy to have it reviewed for you to see if it meets guidelines.