All Forum Posts by: Torrell Palmason

I would suggest trying to qualify with the small pay you take from the business as a Fannie/Freddie/FHA loan is more favorable to a Non-QM/Portfolio loan.

The loan you are talking about is a Non-QM/Portfolio Bank Statement loan. This loan is used primarily for a self-employed and will require 12-24 months of business or personal bank statements. If it is personal bank statements then all deposits will be counted toward income whereas business bank statements will take only count 50% of deposits towards income. The disadvantages of this loan type is it will be a higher rate than a conventional, Minimum credit score allowed is a 660, 6 months of reserves and 15%-25% down(based on Credit score). These terms are based on what my company does and will vary from lender to lender.

Best of Luck!

If your first loan is a USDA and you stayed living in it for one year then you will be absolutely permitted to start a new loan as a FHA owner occupied. Just make sure as you do these owner occupied homes you stick to the one year of occupancy.

Best of Luck!

Your chances of getting are dependent on many things. Going with Conventional investment property the down payment for a single unit is 15% and your max debt ratio is 50% which if we look at your low end of 20k a year brings your max loan to 133,333 with a purchase price of 153,333. This is also dependent on if your door to door has all been on your taxes otherwise there is no provable income. 

The other option is a DCSR loan this will take into account the Mortgage payment versus the rent. This can be done in a variety of methods dependent on the lender ranging from 1-to-1 to 1-to-1.25 meaning 1-to-1 is equal mortgage and rents or 1-to-1.25 meaning rent is 25% more that the mortgage. This loan will not take into account any income and as such is a riskier loan for lenders so the rates will be higher than a Conventional.

Best of Luck!

Simple, refinance the land only right before you close on your construction loan. The construction loan will pay off the land loan as its first disbursement of the construction loan. You will get 70%-75% of your land costs back with the refinance of the land. The rest will remain in the loan and act as your down payment on the construction loan. Credit unions are your best bet to purchase or refinance land.

Best of Luck!

So your home must be at 70% Loan to value and at 30% equity to remove PMI. The way you worded it seems like you were getting terms confused but based on what you said you should be at 60% LTV. The only other thing needed is a good payment record as in no payment 30 days late in the past 12 months and no payment 60 days late in the past 24 months. This is straight from the Fannie Mae Servicing Guide.

Best of Luck!

@Brandon LaFrance

While that is a slight roadblock that is not a deal breaker there are still options out there for you. The two options that come readily to mind are both Non-QM as a Bank statement loan and DCSR(Debt-Coverage-Service-Ratio) loan. 

The Bank statement loan is used primarily for a self-employed and will require 12-24 months of business or personal bank statements. If it is personal bank statements then all deposits will be counted toward income whereas business bank statements will take only count 50% of deposits towards income.

The DCSR loan will take into account the Mortgage payment versus the rent. This can be done is a variety of methods dependent on the lender ranging from 1-to-1 to 1-to-1.25 meaning 1-to-1 is equal mortgage and rents or 1-to-1.25 meaning rent is 25% more that the mortgage. This loan will not take into account any income and as such is a riskier loan for lenders so the rates will be higher than a Bank statement loan.

As with most questions with investing speak to your lender to discuss these options fully so there is no miscommunications and you can invest while putting your best foot forward.

Best of Luck!

What are your thoughts as to the protection a LLC will give you? There is a common misconception in the real estate world that an LLC will fully protect all of the assets that a person has outside of that LLC. The reality of the situation is that if an opposing attorney is dead set on piercing the veil of the LLC they can do so fairly easily. Because of this, the best set-up is an LLC with the highest liability coverage you can get plus the highest umbrella coverage you can get.

The issue with transferring the title to an LLC is that it violates the Due-on-sale clause of the lending contract. The exception to that rule is that on June 1, 2016 Fannie Mae changed their rules to allow the borrowers on the loan to transfer title to an LLC that the borrowers are the majority members of the LLC without it violating the Due-on-Sale clause. So you need to double check your existing mortgages to see if they are Fannie Mae loans that originated after June 1, 2016 if so you're clear to transfer, if not you will be violating the Due-on-Sale clause.

Even if you violate the Due-on-Sale clause and if the lender becomes aware of the violation it is up to the individual lender to decide if they will call the note due thereby foreclosing on you. They typically find this out due to the fact the LLC must take out insurance in the name of the LLC at which point the insurance company will send a new binder to the lender as proof of insurance. The lender will see that the insurance shows a different name than the borrower they have on the loan, this is when they become aware of the title transfer.

I hope this helps you understand some of the issues you're going to run into based on your game plan.

Best of Luck!

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First of all to truly answer your question we would need to know what index the seller is basing off of, what margin the seller wants, what your lifetime and floor caps are, what your adjustment caps are, what your starting rate is, How long is your initial fixed period and how often does the rate adjust?

Once you have all that information I can help you better understand the financial implications.

Best of Luck!

As you've heard from your existing lender you will need to prove your 1099 income for two years and have it show up on your tax returns. Or other options as previously stated a DSCR Loan or bank statement loan, these are known as non-QM loans you will need to get to a lender that has these loan types as an option.

The drawback of these loan types is that the interest rates are about 2% higher than Fannie/Freddie, however Fannie and Freddie just announced a maximum of 7% of any lenders portfolio sold to them could be a 2nd home or investment home. So that means lenders will raise the price of Fannie/Freddie 2nd home and investor home loans to about the same pricing as non-QM loan.

Best of Luck!

Best advice I have for you is get your mortgage current, work on your credit to get 620+ and then focus on the purchase.

Best of Luck!