All Forum Posts by: Zach Wain

No this is not normal. But, the most common problem with DSCR loans is when the DSCR ratio changes from the loan officers initial estimate. If they thought the property cash flows $3,000 per month on a $2700 payment but the rent comps come back at $2,600 per month that changes EVERYTHING in the DSCR pricing world. The loan officer must have made a pricing mistake somewhere in the process.

HELOC!

We had a LOW inflation report today (7/11/24), big win!! Today's low CPI inflation report helped bring mortgage rates and bond yields lower. Headline (total) inflation for the past month was negative, -0.1%.

Core inflation (total inflation minus food and energy) was up only 0.065%, so it gets rounded to 0.1% increase. That is a great number and bond markets love it. This should open the door for the Fed to hopefully consider a couple of rate cuts this year.

We also had the lowest "shelter" reading in a long long time, of 0.3% for rents and OER. Total Shelter was 0.2% because lodging away from home dropped.

One item that is still sky rocketing, auto insurance! 19.5% increase in the past 12 months. Ouch!

This is the 3 month downtrend we have been on.  This is a 10 yr treasury chart over the past 3-4 months.  Mortgage rates do not perfectly move with the 10yr T, but its pretty dang close.  It has been slow moving trend, with ups and downs, but its encouraging to see a stable downtrend.  In mortgage rate/bond world, the next set of economic reports (Jobs, inflation, retail sales, etc) can always change the picture quickly.  But, with shelter inflation (hopefully) on the downtrend, that should help keep inflation readings low.  Hopefully, lower rates are in the near future...

Option 2.  The odds of that an engineer will say its perfectly up to code and it requires no changes is probably pretty low.  Have an architect look at the unit, and draft up plans exactly the way it is but they will likely give you a couple things that needs to be changed for it to be up to code.  Then you submit plans to city, they may reject them and make a coupe more changes.  Then you complete the changes and you are good to go.

Considering most homes will not cash flow with 20% or less down, plan on 20% and most likely 25% down required - depending on the cash flow expectations.  If you can go conventional, go that route first.

@Deepack Kris - Reach out to Angelo at https://lendwithleverage.com/

Angelo is a great Broker in NC, I have known him for years.  He does great work!

 Correct.  Its not always a perfect no cost, sometimes it a low cost refi, or sometimes the lender credit can be larger then the costs and its actually a negative cost refi.

 You can do this with conventional loans all the way up to 10 properties.  Its my favorite strategy!  As long as you are ok moving every year its amazing

@Johnny McKeon - nice work!  I was about to say todays rates with no points on that scenario is in the high/mid 6% range.

For a refinance, its a combo of rate drop/payment reduction and the loan costs for the refi.  I often refi people with a 0.5% rate drop and no closing costs.  Its an immediate savings, no worry about having to wait 3 years in the loan to offset the massive closing costs some lenders charge for a lower rate.  Savings vs cost!  Whatever makes sense to you, but I would jump at a free refi of 0.5% or more.

@Troy Smith - if you buy a new primary home its 5% down for a conventional loan or maybe FHA works as well with 3.5% down. You can leave your old home loan alone. You can do this every year if you want, its a great strategy to buy homes with minimal down!!

You must occupy the new home for at least 1 year.