Invesment Property financing - Posted by Allan

Posted by Ben Carmona on October 14, 2008 at 09:15:29:

Hi Allan,

Several quick thought come to mind?

  1. Why do you think that you need a stated income program?
    Many borrowers have been coached into these loans because many mortgage originators do not know how to read personal/business tax returns. So they simply tell the client that they cant qualify full doc. I just closed up 2 loans for a borrower who thought this too. After anyalyzing their income I discovered they pay some of their personal liabilities (auto/cc) via the business. If you can show the lender 12 months of consecutive payments that were made by the business this can be excluded from the debt to income ratios as it would be counting against them twice. (once after being dedcuted as expenses on the returns).

If your business simply isnt generating income then thats a whole other story. A stated income loan could not be done if you really dont have the income to qualify.

  1. Using the value rather that the purchase price wouldnt be a problem if you can find a solution to your income scenario.

  2. You may want to try using a commercial/business loan. Instead of 30yr fixed loan they will be 20yr ams with a 3-5 yr balloon. Lenders that do these will be looking at the debt service of the ratio. Sometimes they will look at your over all debt service ratio, siilary to how conventional lenders review your debt to income ratio.

I would recommend getting in touch with a mortgage professional who you can discuss your income structure with thenget advise on how to proceed.

Ben Carmona

Invesment Property financing - Posted by Allan

Posted by Allan on October 13, 2008 at 10:12:27:

Hello All - I’m a Orange County, CA wholesaler which means tons of opportunity in our market. Currently, I need to hold one of the properties that I’m looking to purchase since it will be a good cash flow in the future. Here’s the situation: Purchasing REO @ $208k, approx 65% of value.($320k) I will be using a hard money loan, at $176k, and another private financing will provide me with the difference. After rehabbing the property, I need to get out this hard money loan and have to refi using a conventional lender. The problem is that this transaction will be a refinance rate term, non owner property, stated income, verified asset, at 70% ltv, possible loan amount around $225k, fico 720+, but we would have to use the actual market value and not the purchase price…any idea who could be doing this loan right now?