All Forum Posts by: Weng L.

@Marcus Gaethke

Choose 5/1 arm. no brainer.

If you don’t pay discount point, the 30-year fix rare is like 6.25%.

Given the 1/1/8 cap, the 5/1 rare will not hit 6.5% until year 8. Even if it continues going up by 1% every year afterwards, the break-even point of fix rate versus 5/1 rate is on like year 13 (you save money for first 7 years and pay more after year 8). That is the worst case scenario that we assume rate is up significantly.

So at year 13, the property value will probably doubled. You want to cash out refinance to pull your equity out.

In reality, you will likely be able to refinance to get a lower rate when rate is low in the future, and you will cash out refinance to pull equity way sooner than year 13.

Thank you again @Zack Karp So jumbo loan lender can lend even if borrower has 10+ financed properties then.

But don't you conflict with yourself? You first said "it is a Fannie/Freddie/Jumbo/FHA/VA guideline for ANY primary residence mortgage, that blah-blah", then on your second reply you said "With jumbo, any lender can make their own guidelines and do whatever they want". If each jumbo lender can make their own guidelines, then why can't they make their own decision on how soon buyers have to occupy properties after closing?

@Zack Karp Thank you for your clarification.

On a unrelated question - is jumbo loan a sub-category of Fannie/Freddie loan, or they are completely separated loan programs?  Fannie/Freddie limits a buyer to have a max of 10 financed properties Is jumbo loan subject to the same limit or not? If jumbo loan is not sub-category of Fannie/Freddie loan, it should not have to follow Fannie or Freddie guidelines, correct? 

Lease is expiring and I plan to sell the property, but tenant wants to renew the lease for another 7 months till 6/30/2022. If I put the property for sale now and if a buyer is willing to buy and take over remaining of the lease, will lender issue primary-home mortgage if the buyer will not move in until 7/1/2022?

The sale price will be $620-650k. The mortgage will most likely be either conventional or jumbo (depending on down payment amount). I found a place online mention about the rule of primary home loan - Buyer has to move in within 60 days after closing. However I can't find any official (Fannie/Freddie) document that mention about this. If it is a jumbo loan, each lender has their own guideline or flexibility on this and is not subject to Fannie/Freddie guideline, correct?

Hi

https://www.irs.gov/businesses...

According to this IRS guideline, I am supposed to use SSN to file tax return for my LLC (I am the single member of the LLC). I searched in BP and folks here said single member LLC can elect to have EIN too.

The thing is I am applying for a mortgage under LLC and lender requires EIN in order to not report the loan to my SSN. So I have 2 questions:

1) Am I allowed to apply for EIN for my LLC where LLC is a single member LLC?

2) After I have EIN on LLC, am I required to file tax return separately (separate tax returns for SSN and EIN)? or I have the option to choose to file tax return either separately or together (report everything under SSN)?

I asked the same question a while ago here also searched in BP, several people answered that their lenders count number of loans on your credit report (so only if the loan acquired by LLC is NOT reported to your credit report, it most likely won't be counted as 10 financed properties even if it shows up on your 1040.).

Fannie Mae guide on what counts towards 10 financed properties:

https://selling-guide.fanniema...

The borrower is purchasing a second home and is personally obligated on his or her principal residence mortgage. Additionally, the borrower owns four two-unit investment properties that are financed in the name of a limited liability company (LLC) of which he or she has a 50% ownership. Because the borrower is not personally obligated on the mortgages securing the investment properties, they are not included in the property count and the result is only two financed properties.

This example says "borrower is not personally obligated on the mortgages". So the property and loan has to be under LLC and the borrower is not personally obligated on the mortgage.

I am wondering if "personally guarantee" means reporting to credit bureau?

Thank you for your reply @Tom Day.

What if short-term rental manager (the one that signs a lease of fixed rent with me) pays more than rent of long term lease (e.g. $3000/mo versus $2500/mo), is it worth renting it to the short-term rental manager (I assume that increase of insurance premium and additional $1M-$3M liability coverage cost no more than $150 more per month)

Also I see Airbnb has $1M liability coverage that "generally applies first regardless of other insurance policies you may have". 

https://www.airbnb.com/help/ar...

Host Protection Insurance is a liability insurance program. It may provide up to $1,000,000 USD in liability coverage for a host’s legal responsibility to a guest or third party that gets hurt or has their property damaged due to an incident related to an Airbnb stay.

Host Protection Insurance is primary liability insurance coverage, meaning it generally applies first regardless of other insurance policies you may have.

I have a small 3/2 no-pool upgraded house in Fort Lauderdale zip code 33315 that receives several calls from vacation rental managers. Some of them want to rent it from me for $3500+/mo and turn the property into short-term rental themselves; others want to to charge a percentage of gross revenue for full service management (They claim that it generates minimum $5000-$6000 revenue. I am not sure if this number is exaggerated though as I have no experience in short-term rental market). Which one of these 2 types of lease is better? For the percentage-based full service, what percentage do you pay?

Anyone with short-term rental experience can offer some tips and recommendations?  Thanks!

 Not necessarily like that. Some private lenders report loans to credit bureaus, some lenders don't

Hi,

I just talked to LendingOne sales and they told me that their 30-year Rental Loans do not report to personal credit report (under SSN) but only report to business credit (under EIN), but they still need to pull your personal credit report during the application. 

Has anyone used LendingOne's 30-year Rental Loan before? Just want to double check if the loan is indeed not shown on your personal credit report. 

Thank you for feedback in advance.