All Forum Posts by: Zach Bosson

Adalberto! A few things.
1. If you're buying a new primary in many cases you can simple buy again with an FHA loan allowing you to retain the low rate on your current, you'd have to have a qualifying event which is usually manageable.

2. If your credit is strong enough, and if you're considering cashing out your current primary into a conventional it'd have to be, then you could just buy the next home with a conventional loan avoiding the need to refinance(assuming you have the cash for a down payment)

Is your your goal to use an FHA loan is to be able to put 3.5% down instead of 5% down?

1. If you're taking cash out of the home, getting to 5% shouldn't be an issue, so you could buy the next home conventional.

2. If the 1.5% is causing a stretch, I might recommend waiting until you have enough saved before cashing out your current home, increasing it's payment, and adding a new home in the mix!

Finally, a HELOC/HELOAN is an option, we specialize in those. Giving you access to your equity on your current home while retaining your low rate allowing you to buy the next place, and potentially have a little extra for the new expenses that might come up owning 2 homes. You'd want to make sure you understand if the property cashflows, would the rents be larger than the 2 mortgage payments? If not are you comfortable at a breakeven/loss to scale?

@Patrick Shep

Hey there! Good question - your purpose of funds shouldn't limit the amount of cash they lend you! The value of your home and their loan to value ratios are going to be the determinate factor there.

The only potential concern with your stated purpose is that there could be new debts introduced to the application in the form of future "real estate" aquistions that may raise more questions. We'd have no problem with that explanation and ask no further questions - but that's my best guess!

Perhaps you could reword it to "future investment opportunties" which would both be truthful but less specific to avoid concerns - I wouldn't suggest missrepping on your app!

@Marissa Gallant

Hi there, I wouldn't assume that a cashout refinance is a better option! 60% of homeowners have a 1st mortgage rate under 4%, refinancing that loses an asset (your low rate). That doesn't mean a HELOC is automatically a better option, you should look into both!

We offer both HELOCs on investment properties(rare) and Cash Out refinances feel free to reach out if you'd like to learn about your options!

Hi there!

We offer the following on investment properties.

- HELOCs

- Traditional 2nd Mortgages

- DSCR 2nd Mortgages

I've helped a ton of BiggerPocket investors already who have been disappointed by what else they've seen out there! Feel free to connect directly.

Hi Lily,

I founded First Access Lending to provide Access in scenarios just like this!

We offer HELOCs and second liens on investment properties, financing up to 80% of the property’s value. Additionally, we can run an automated instant valuation to save you both time and money on appraisals.

Please let me know if you’re interested in getting a quote!

Angel,

The 2nd lien programs I offer all allow for AVMs(automated valuation model), they provide a value instantly and you'll know how much you can borrow instantly without having to pay $500 for an appraisal just to maybe get nothing.

Zach

Hey Angel,

The terminology can definitely get squirrely. Jackson nailed the answer to your first question.
A HELOC is a line of credit using real estate as collateral.

A credit card is a line using your credit as collateral (nothing).

A business line of credit uses your business as collateral.

A "PAL" or pledged asset line is a line of credit that uses your investments as collateral.
Etc.

All of them share in common that they are a line of credit; you draw what you need and only pay interest on what you use.

Traditionally, lines of credit that have collateral are going to have much lower interest rates than those that don't, like credit cards, because in the event of default there is nothing to seize. That's why the average credit card rate is in the 20s. But as a short-term solution, playing the 0% credit card game can be an option, but from my experience, juggling from one to the next with no backup plan often ends in paying high interest in the long run. Credit card companies are for profit; they're offering 0% for a reason, after all!

Which option is best will be individual to you. Happy to chat options—feel free to connect.

@Spencer Fry I've made it my business to specialize in second liens. I founded First Access Lending to provide access where others can't.

I can write second liens up to 80% CLTV on investment homes, sometimes with rates lower than cash-out loans, AND you get to keep the low rate on your first mortgage.

The products are rare, so I'm not surprised to hear other lenders saying they don't offer them and/or recommend other products.

Let's connect, and I can give you a quote!

Ivorie, in that case you could just do a traditional refinance of the borrowed funds form the private lender. There is traditionally no waiting period for a rate/term refinance. You would not be able to access additional cash beyond what was borrowed.

The other scenario worked similarly, you can't borrow beyond the cash you paid. 

 Yes that's me! Talk soon.