All Forum Posts by: Shaun Weekes

Hello Tyler,

It all depends on what type of mortgage program you're using. 

If it's conventional and it's over 80% most likely you'll have to escrow.  California is at 90%

If it's an FHA or VA loan you have to have impounds ( escrows ) no matter what

If it's LP open access and your current loan had impounds you'll have to continue with impounds.  If it's less than 80% and you didn't have impounds then you don't need to have them.

The best way to go about this is ask your loan officer or broker when you're ready to move forward or give them a specific scenario. 

Also remember that if you impound your taxes not only will you pay a monthly fee but depending on what time of year it is you'll have to put extra money in an escrow account. 

Say you were closing on a loan in June and you wanted to escrow your taxes and insurance.  Most likely the lender would require 5 months of escrow and taxes impounded or saved up in an escrow account.

Example:

If your mortgage payment is $1,000.00 and your impounds are $200.00 your monthly mortgage payment will be $1,200.00. You'll notice on your HUD-1 that you'll also be charged 5x40 for your insurance which = $200 and 5x160 for your taxes which = $800 So that's an extra 1K that you'll need at closing however as long as your payments are always submitted on time when you refinance or sell you'll get that 1K refunded to you.

Nathan,

Is your rental property located in the USA?  If so do you also work in the USA or did you get a loan under a foreign national program?

Or are you an American working in Timmins, Ontario, Cananda?

I just need a bit more information in order to give you my opinion on how to go about doing this refinance. 

Oh and you don't need 2 years of rental history for your income to count.  This is typically an investor ( bank ) overlay.

Hello Chris,

You hit the nail right on the head when you brought up your schedule E income.  By you saying that it's telling me that you bought these houses at least last year so here is an easy way to calculate your rental income PER property. 

Schedule E calculations are as follows:

Add line 21

Add line 19

Add line 18

Add line 9,12,16 ( if you're using the full PITI payment ) Which the bank will if you're using schedule E income.

Divide this number by 12 for your 2013 income and repeat the same method for 2012 Schedule E

So say that you made 48K on your W2 and -500 on your schedule E. Your income would be 4K - 500 = $3,500.00 per month then divide your total credit report debts by your income to figure out your DTI

$1,500.00 in debt / $3,500.00 in income will give you a DTI of 42.86%

Now if you would have purchased this home this year you could you 75% of the lease agreement.  So if the lease agreement is $1,000.00 then you could add $750.00 dollars to your W2 or Schedule C income or whatever you claim on your 1040's

In conclusion if you have a home on schedule E you won't be able to use the 75% calculation and if you bought the home in the same year you want to use the income you can use the 75% calculation.

It's really important to get with a broker or Loan officer who knows when to use the appropriate calculations and also is in it for the long run with you.  This way they will know your situation because they've done all your financing for years.

Hello Chris,

If you can show your graduation papers ( Diploma ) the FHA will be able to help you with this situation. A lot of banks have overlays for this type of scenario but they're a lot of banks that can help you as well.

Hello Rainier,

There is a lot of additional information that is required to evaluate this GFE.  You would need to show us the fee sheet to see if you're getting any costs paid for from the lender.  The appraisal fee is something that is out of the lenders control in regards to fees.

I noticed you live in Cali and the refinance is in FL so this is a second home or Investment property which means that there will be extra hits to the rebate of this loan. Which will in turn move the interest rate up if this is lender paid. If this loan is borrower paid then you'll either have more closing costs paid for or a lower rate. Also since this is cash out there will be additional hits and your LTV plays a huge roll as well and so does your fico score in regards to pricing.

There aren't any transfer taxes on a refinance, credit report fee is something people like to do but it's not my cup of tea personally. 

I could be wrong but does Florida still have those doc stamp fees or something to that effect?  ( I haven't done a loan in FL for over 6 yrs )  I would check on that because it's more money that you would have to come up with. 

Certain items on the GFE can't move up or down more than 10% and other items have zero tolerance so keep that in mind when you review the initial GFE compared to the final GFE and ask what those fees are.  You LO or broker should be able to answer those questions right away. 

There is more that I could mention but you need to either ask him or her how they're coming up with these fees or get a couple of quotes. 

I hope this helps and have a good one.

Hello Nadiya,

Check to see if your property is owned or serviced by Fannie Mae or Freddie Mac.  You can do this by going to the following websites

https://knowyouroptions.com/loanlookup ( Fannie Mae )

https://ww3.freddiemac.com/corporate/   ( Freddie Mac )

If your loans is owned or operated by either of these companies you might be able to refinace under DU Refi Plus ( Fannie ) LP Open Access ( Freddie Mac )  The programs are made specifically for people in your situation. 

I hope this helps and let me know how it goes and if you need any additional help.

@ Andy Collins

No problem Sir. This is DF things in my personal opinion is to regulate the mortgage industry enough to where Wall Street will get back into the game. And by that I mean buying mortgages again on the secondary market. That's just my opinion though and to answer your question one of those major regualtions is going to be 43% back end ratios. DU ( Desktop Underwritter ) and LP ( Loan Prospecter ) are still approving DTI's over 43%

As long as banks are getting approvals and they have no overlays they will fund deals even if they're over the 43% range. 

I'm not sure when the 43% max DTI will actually come into effect but I am sure that banks will find a way around it whether it's through a portfolio product they introduce or perhaps banks will start to hold more paper.

For me personally it's been business as usual.  The big thing that changed on Jan 10th of this year was the 3% rule to protect the customer.  The broker fee coupled with any bank fee can't be more than 3% of the total loan amount.  However they're ways around this rule so in conclusion I would say that everytime time something in this industry gets regulated someone else comes out with something to get around it.

I tend to ramble a lot but I hope this makes sense :)

Hello Drew,

If you get the foundation fixed and completed properly before the appraiser comes out then you shouldn't have an issue.  The lender is going to base part of their decision on the appraisal and if it doesn't mention anything about foundation then you should be good.  It might say something like the foundation was just completely re done in a craftmans like manner.  If anything this should help because they know the foundation is new and completed well.  You might want to get a structual engineer to also give a report when this is done to have an even stronger case.  If an engineer is used you for sure will be ok. 

Hello Ryan,

If you bought this house under 6 months ago then you can qualify for delayed financing and get a C/O refinance for up to 70% LTV. This is based on fannie guidelines and they're are some other items that you would need to produce as well to qualify for delayed financing.

I hope that this helps you with what you're looking to do.