About a year ago I jumped on a piece of property that I intended to make my first investment property. Because we scored a desirable piece of property in our current neighborhood, my wife and I ended up building our dream home. The intention was to move into the new home and either lease or “Flip” our longtime home which has appreciated nicely. We took a Heloc on our current home which took us to 80% LTV.
On the new home there is the following financing:
1st mortgage of $562,500. (Interest Only for 2 years)
2nd mortgage of $521,000. (1 year Construction Loan, hard money w/12 months interest prepaid)
The market value of the finished property is estimated to be $1.5 - 1.6 Million.
We’ve struggled to reach the end of the project having to use our personal credit to do so but we are almost their with the help of our Contractor. We owe the contractor and have been trying to do a cash out refinance on our new or existing property with our usual broker but because our debt to income ratio is out of whack he can’t pull anything off.
On the current property we have:
1st Mortgage $457,000
The market value of the current property is between $800,000 - $850,000.
We have reasonably good credit right now (680+ median) and our combined income is good.
Unfortunately we do have a lot of revolving credit that we used to get the new house to where it is.
I am asking any of the seasoned vets here if it is possible to do a no ratio refinance on the new
home pulling some cash out to pay our contractor and perform needed repairs on our current house to better position it in the market. We’d be looking for about 80% LTV on the new home.
We are looking for some quick options here before we decide to just list our current house with minimal improvements.
Though it seems unlikely, I wonder if we could do a 90% refinance (cash out) no ratio on our current property at the same time since we plan to sell it anyway?
Once the smoke clears and our DTI ratio is back under control we would likely want to refi the
no ratio to a conventional to get the payment down.
Any advice would be welcome.
If you know someone reliable in the Los Angeles Area who can do this, please advise.