Posted by Jim Upchurch on May 25, 2001 at 10:02:16:
Kiersten is correct. A gift is not allowed at 90%. If you can do an 80% LTV, the remaining 20% can be a gift and no down payment is needed.
Good Luck…
Jim Upchurch
RENTAL PROPERTY MORTGAGE - Posted by JAMES
Posted by JAMES on May 23, 2001 at 18:05:00:
HAVE SPOKEN WITH SEVERAL MORTGAGE BROKERS ABOUT FINANCING A RENTAL PROPERTY, ALL HAVE SAID I WILL NEED A MINIMUM DOWN PAYMENT OF 10%, I HAVE ENOUGH EQUITY IN MY CURRENT HOME TO TAKE A SECOND MORTGAGE OUT TO COVER THE 10% DOWN, WILL THE MORTGAGE COMPANY FOR THE RENTAL PROPERTY SEE THIS AS A PROBLEM. ANY SUGGESTIONS WOULD BE APPRECIATED.
JAMES
Re: RENTAL PROPERTY MORTGAGE - Posted by Kiersten
Posted by Kiersten on May 23, 2001 at 21:21:48:
I presume they are talking about the Fannie 90% investor loan. It’s a great program–decent rate and not too picky on property. As far as source of funds, we can see a debt taken out as long as it’s secure. So a mortgage on your primary residence is fine. “secure” meaning borrowing equity you have–a loan against a boat or car you own outright for instance is fine. An unsecure loan like an advance on a credit card is not allowed. Keep copies of your refi Hud1 and cashier’s check from the closing to source the deposit you make in your account and you’ll be fine.
Re: RENTAL PROPERTY MORTGAGE - Posted by Bud Branstetter
Posted by Bud Branstetter on May 23, 2001 at 23:04:50:
Since you will of course be buying at a discount you can use the gifting technique. The sales price is increased to full value to cover the down payment. The seller donates to one of the non-profit gift organizations. They in turn gift the down payment to you. The seller gets their price, your mortgage is the same but you don’t have to come up with the down.
Re: RENTAL PROPERTY MORTGAGE - Posted by Kiersten
Posted by Kiersten on May 24, 2001 at 08:14:27:
Unfortunately, the Fannie 90% investment loan does not allow any gift fund so the non-profits are out. Normal conventional requires 5% of your own money but anything including your closing costs above that can be a gift but the 90% investors loan requires that all your funds are your own. I’m doing one right now with a client and spoke to three different underwriters trying to get around this but Fannie is very specific in their guidelines that the funds be the buyers. good idea though–wish it worked.