So I’ve always been interested in purchasing to rent and I finally decided to make my move.
After much research and soul searching I found the right place and put in an offer. Turns out someone else already made an offer and mine was accepted as a back-up. We kept looking and a few weeks later learned that the first position buyer couldn’t get financed so we were in.
My wife’s grandmother was super excited because she made a small fortune decades ago in Ohio buying and renting. This was good because we made an offer of $75,200 and had to put 20% ($15K) down. I took a withdrawal out of my 401k and grandma offered to give us $10K, call it an early inheritance.
My mortgage broker told me that should be no problem as long as I had 5% skin in the game. Then came the Inquisition.
My wife and I have credit ratings north of 840. I thought that would help. Bank statements for the last 90 days with any deposit over $250 having to be clearly explained. Oddly enough they did not care about withdrawals. Last three years tax returns, three years W-2s, 401k statement; there seemed to be no end.
Finally had all the paperwork necessary and all we were waiting on was the appraisal. Then the call from the broker came.
“Hey Dave, problem. The rules have changed. No investor will approve any loan on investment property with any gift funds.” I went to a couple other banks and the answer was the same.
A week later we finally found an investor that would approve the deal if grandma “loaned” us the money secured to our primary residence and recorded by the register of deeds; even though a day after we close she could relive the debt.
So the appraisal should come back sometime today. Closing is scheduled for December 22nd.
House is in good condition, maybe needs about $500 in cosmetics.
Principle + Interest + Taxes + Insurance = almost $500. I already have a renter lined up @ $850 month.
Anyway, my name is David and I am out of Wilmington, NC. I would appreciate any help or advice anyone can provide. If anyone out there needs any help, feel free to give me a hollar.