Quote:
Originally posted by turbo6bar
Randy P, am I close on that or is the hashish still doing the talking?
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pretty much correct - however it's going to be stiff to qualify under FHA guidelines -
FHA is sort of a dinosaur these days - conventional offerings will give you similar rates but without the MI that FHA makes you take, also the amount you can borrow vs. income (AKA debt to income ratio) with conventional is much more, not to mention it's generally an easier process .
There are a LOT more offerings under conventional guidelines that will literally blow FHA off the map. FHA also requires a minimum cash investment / down payment to qualify.
2nd Biggest issue I see here would be getting preferred rates if you have multiple properties -
- Debt servicing - do you have enough active income (taxable income reported) to support multiple properties, even with rental income?
- amount of downpayment. You pretty much have to have stellar credit to even think about a low downpayment scenario buying a property labeled as an "investment" property. If the bank notes multiple mortgages on the credit report, they will ask where the properties are, and assume that if they are all local - YOU LIVE IN THE MOST EXPENSIVE ONE. Even if truthfully, you tell the bank you are moving into a less expensive property. If there is a more expensive one that you own in the area, they will assume you will always live in that one, and bill you accordingly.
'If the property is in another state for instance, you can get away with calling it a 2nd home which will get you better rates and less downpayment requirements.
Therefore, multiple properties will be an issue to finance if you are wishing for "conforming" rates. typically expect anywhere from a 1% to 2.5% hike in rates across the board buying under the "investment" flag. Also, unless you are an absolute stud with mucho cash flow, you'll probably have to go "stated" which will add at least.75% to the rate as well, so expect it.
Most lenders don't care how many properties a person may own (or at least what's showing on the credit report
) but are mostly concerned with how many properties THAT PARTICULAR lender has that you control already. Most lenders from what I seen will only allow up to 4 properties financed through the same bank.
There are very creative ways around it, more on that later.
rjp