Thanks to all lenders or experienced investors who will make an educated guess to my question. i know its not cut and dry, but would like a good idea.
Here is my scenario/details:
–750 Fico Score
–20 year old male/ college student
–30,000 cash (worked at GM for 6 months and daytrade stocks)
–problems…-last year made $3000
–at the time of the loan application, (couple months) i will be working, but only making $150 a month. ( i know lenders like steady jobs.)
So i know i got a good score, good money, but my non job makes me wonder if i can get accepted. But i cant get a job if i am beginning to rei.
Also in my scenario, what loan should i look for. (owner occupant, iinvestor, hard money)? I would be looking to buy, fix up, and flip. Although i here that when you start out, you can get owner occupant and when you go to sell it, say that you changed your mind about living in it.
Sorry for the long post and i would greatly appreciate any and all comments or suggestions regarding my situation.
You need to shop for a NO DOC loan. With your score doing NO DOC owner occuppied you maybe able to get 100% LTV, definetly 95%LTV…
all brokers write these loans, its nothing special…just check rates, points and how much they are hitting you on the back end. Reality is, all brokers have access to the same products, the banks always have a min. interest rate they can charge and some charge higher to make more money. Same as points…
Just call around alittle…just dont let brokers pull your credit all day long.
Andy is right. It will have to be a No DOC loan. I would put as little down as possible and not worry too much about interest rate if you intend on flipping it in 6 months. Find a broker that will not charge much up front and maybe make the money in the back since you won’t be keeping the loan for too long (as long as its over 3 mo.). Make sure there is no prepayment penalty on the loan also if you plan on flipping the property. Use your funds/lines of credit/ccs for the repairs. This will probably be your cheapest route unless you can buy the house on a land contract and find a buyer after the rehab, which will save you money on closing costs.
If you have a 660 FICO and anything else working in your favor (income, cash or equity) Recasa Financial and Chase Home Finance are an unbeatable one-two punch.
Great thanks soo much guys on the help and advice.
It seems like i need to do a low doc or No Doc owner occupant or investor loan.
if i can recieve both owner occupant and investor loans, what is the money difference between the both? If i were to be able to get a owner occupant and plan to sell it within 3 months after buying, should i get an owner occupant or investor loan? I dont know how much more money it would cost me in fees and such with an investor loan.
Also i see people saying they pay “cash” for houses. Are they really paying cash or is it just their loans?
Should i be trying to keep ALL my money out of the loan and just use it as collateral, or would it be better to put a 30,000 down payment on the house? I hear people saying put as less amount of money into the house as you can.
Thanks again guys for all the help as i will be buying my first property in the next couple of months.
Yeah…Recassa…They rock! I called them up and said, “Look. This is how we are going to structure this deal…” and they respond with, “Sounds Great! Lets do it.” You can’t beat that.
well first i would ask, since you are in school.
do you have a sufficent credit history.
I only ask because i have dealt with many college students who wanted to invest. They had high credit scores but only because they had 1 credit card that was paid well and other credit lines that were school loans with deferred payments.
Second Depending on your employment history you may even be able to go stated income. they would verify you are employed but not ask salary. Also if your employment is in the field of your schooling they I know banks who will use your college edu as part of work history. You can do 100% financing on the property also. Even as an investment property. You can see about getting up to 6% contributions from the seller for closing costs also.
If you are going to be buying properties to fix and flip then you will not be able to get an owner occ loan. The lender expects you to live in that property for at least 12 months. Extenuating circumstances do come up from time to time, but you just dont want to get in a habit of trying to circumvent lender’s guidelines. There’s to much room for fraudulent activites. Your goal as an investor (that is what you are trying to do) should be looking at this as a long term business and structure yourself within the law.
Recasa, the rehab lender mentioned previously, will not do loans on owner occ anyway. They require tax returns and bank statements to make sure you have cash flow to support the monthly payments; they will not roll your payments into the loan. They also limit the # of states you can work within. Although they go higher than most hml, 80%, there are more flexible sources of rehab funds at lower ltvs at 70% arv. These sources do not require income or asset verifications and have similar costs and payments, which can all be rolled in. (your holding costs are covered)
One thing to remember also is that you may not need a rehab loan. If the property is an at least average habitable condition, then you may be able to qualfiy for 100% financing through the conventional lenders that mortgage brokers use. This loan would not cover you rehab or carrying costs but it sounds like you may have the resources for that.
If you do decide to use private or hard money funds there should be no reason to do a refinance. Recasa’s loan is 9 months long and most other’s are 6 months. You should be able to have that property completed and sold well within the time frames.
Just by chance that you do decide to go a conventional purchase and use your own funds…your loan would not be a NO Doc. Rather, this could be done as a NIVA (no income/no employment with verfied assets) 100% possible and better rates than a no doc.
One other thing to mention, these conventional no doc loans and niva that we’ve been discussing have credit requirements other than just your score. Normally they want at least 3 tradelines that have been open for at least 12-24 months. Some lenders are a bit more restrictive. Not only are there credit requirements but they have housing history requirements which means that you have to be able to document 12 months of rental histroy.
It was mentioned that you may be able to go stated. That’s not an option for you. You mentioned here that you only made $3,000 last year and are making $150/m now. You cant just plug in a dollar figure for your income that makes the deal work. That’s fraud and the reason why everyone else on here has explained that you need a loan which does not ask for employment/income.