All Forum Posts by: Shaun Weekes

Ross,

If you have no debt and if the home prices aren't like they are here in california 40K is a lot of money. 

Make sure you speak with a Loan officer or Broker who does a lot of Investment properties because the rules are so different then a vanilla owner occupied property.

Ross,

You can use your rental income right now as long as you do it with a lender that does Fannie Mae loans.  Fannie doesn't care if you have rental experience and they will allow future rents right away.  In your situation you actually want to stay away from Freddie products because they required two years of " landlord " history.

As long as your fico score is good, your down payment is at least 20-25% and your credit report doesn't show a lot of payments that could off set your DTI you should be fine.

I hope this helps and have a good one Ross.

Always remember that there is no rule stating that if you move less than 50 miles away there has to be a reason.  This is a lender OVERLAY and for a loan to be deliveralbe to fannie or freddie there isn't anything that states distance.  Now if it's down the street a UW will ask for a reason and the truth is the best medicine.  I'm moving out of this current home to rent it out and moving into a home in the same area because you're familiar with it or it's close to work.  If it's far away then your reason is probably going to be something like I got a great deal on a home and I'm going to fix it up or whatever the case might be. 

The one year thing is something that you sign in you FHA paper work so to avoid any future fines or penalties it's a good idea to stay in the home at least one year if it's FHA.

I hear what you're saying though and a lot of banks won't do this type of loan because they're scared that the departing residense will foreclosure in the future.  But as long as there is equity in that home and your reason is solid and truthful and the bank has no OVERLAYS you should be good to go. 

20 - 25% down is always the best way but they're other options as well.

Hello Fran,

Welcome and good luck with all your future dealings on here.  This website has taught me a lot and I've make some excellent connections as well.

Keep active on here and you'll learn a lot as well I would imagine.

Have a great day Fran.

Hello Eric,

If you have enough equity to where you can refinance out of your FHA loan after you've had it for one year that's what I would do. Then you can get a duplex and repeat the process as long as you've been there for a year.

If you were a co signer on an FHA loan and then after 12 months of the primary person paying the FHA loan you could then apply for an FHA loan. You would have to have the primary show 12 months of cancelled checks and you could apply and get an FHA loan for yourself. That's the only time you could have two loans from the FHA.

But it's rare in any other instance that you can have two FHA loans so you're idea is a good one. Just please remember if you get an FHA loan be safe and live there for at least a year, then refinance and repeat the process.

Oh and if you're going to get a duplex, triplex or fourplex conventional financing for a refinance of a duplex is going to need at least 15% equity. If it's a tri or fourplex you're going to need 25% equity. So you're plan would work best with SFR's and not really units until you've put together more money to put down.

Choose a really good broker or Loan officer to help you put this together.  You're also going to need a good CPA and have them both co ordinate together to make sure that you have enough income to qualify for future purchases after schedule E is being used.

I hope this helps and good luck.

Hello Alexis,

Depending on how much of a loss you're showing you might want to do two things.  First I would for sure see if you qualify for another commercial loan and going to the same bank that financed you before is a great idea. 

If you don't qualify you can amend your taxes now and then re apply in a couple of months.  This might cost you in the form of paying taxes now but in the long run it will help.

The second option is you can just wait for the new tax year and adjust your taxes so that you do qualify and get it done before June 2015 so that you don't incure additional interest.

If you're self employed you can actually file quarterly and show positive amounts for the first two quarters of this year. 

Make sure you're using a good CPA because this tax thing gets crazy and even though it's good to show a loss and save on taxes it hurts when you need to refinance. 

I would show income if you plan on getting more units so that you won't have a problem qualifying in the future.

I hope this helps and have a good one :)

Hello John,

What is your current interest rate on the property?  If it's isn't less than 4.875% you might strong consider refinancing because that's where rates are today at the high end even on Non-owner occupied properties.

If your rate is good another idea might be to pay down your mortgage and refinance with the new balance.  This way your payment will be lower and you're returning a profit.

Of course you don't want to put down 40K to get a return of $200 in savings as it would take over 20 years to recup your funds.  But if it's a smaller number and makes sense then move on it.

I hope this helps and just give a bit more information and I'm sure you'll get some great advice. 

Hello Everyone,

Bottom line is Fannie Mae allows up to financed properties so if you're bank doesn't go over 4 they have OVERLAYS.

5-10 properties all day.  Now after 5 homes you need to be carefull if you want to pull out cash because you'll only have 6 months to do so under delayed financing.  You'll also need a 720 fico and 20-25% down.

This gets a bit complicated so making sure that you find a professional who knows what they're doing is critical.

Playing telephone with these numbers can cost a lot of money down the road so do your research and work with a pro!

I hope this helps and have a great day.

Hello All,

This post is super interesting and is also a prime example of why the lending industry need to fix these gray areas. 

Everyone that posted on here could have an argument either way but the only way to truly protect yourself is to live in the property for one year.  Now they're exceptions like job relocation or maybe your going to have a baby or two and need more space.  It's tough to get this through but if you document it all correctly you won't have an issue.

In conclusion I would strongly recommend that you stay in the property for 1 year or if you buy another property make sure it's labeled as a second home ( 10% down ) or an investment home which is at least 20% down.

The FBI doesn't mess around and it's not worth it. Just don't label the new home Owner Occupied and stay in the FHA home for 1 year unless you have to relocate or need more room for an expanding family.

That is how I would approach an FHA loan.

I hope this helps. 

Hello Calvin,

Make sure you look to future in regards to your DTI ( debt to income ratio ) so that you don't get into trouble or problems qualifying for a loan when you're on number 8, 9 and 10.

If your price point is 150K i would recommend that you make sure that the rent after a 25% deduction still covers the PITI ( Principal Interest Taxes and insurance ) because this will enable you to qualify for a mortgage based on your salary since the rental income is covering the rentals.

When you do your taxes be careful not to write off too much income as that might hurt you in the future when it comes to qualifying for a loan.

It's really important to make sure that the Loan officer that you use is on the same page as you and does the correct calculation to give you the best chance at getting approved everytime. 

I hope this helps and have take care.