Can anyone tell me or PM me where i can find a no ratio loan for NOO 3-4 families? My plan is to buy run down 3-4 families with my HELOC/credit cards, rehab,rent and then refi with an 80% LTV. My concern is that when i want to go and refi that they won’t take into account the rental income and only use job income to qualify the debt. This is what happened when we bought the 3 families we have now and the same thing when we refianced them. They only use our job income and no rental. So given that our job income can only cover so many mortgages including our own we want a no ratio (or whatever the proper terminology is) where they don’t figure out any debt ratios for the loan. I am located in MA.
Also what is the prevailing interest rate for these types of loans with A credit(high700’s) and 80-%LTV?
Most brokers will be able to offer you that program. It is a standard ALT-A program. As for using the rent money towards qualifying that should not be a problem either. One thing you should be aware of is that some lenders will require you to carry rent loss insurance if you’re using rental income to qualify. However I think the first thing you should do is find a good broker who specializes in investment properties. This type of mortgage professional will now how to help you qualify for and manage a mortgage portfolio. Since you are using your own funds to purchase and rehab you want to make sure that you don’t have any issues when it comes time to move it from your books and into a mortgage. Hope this helps.
Thanks Chris. I noticed in your sig that you are a broker. Can you do loans in MA and can you assist me in this situation? We used 2 different brokers for the purchase and refi and they both got the same type of loan where they only used our job income to qualify. They said we could do 1 or 2 more multi’s and then our DTI would be maxed out. This made no sense to me because i know that there are people who own many multi families and some of these people have so many multi’s that the multi’s ARE their job.
With your credit score you may be able to qualify for a “no ratio” loan.
There are other factors that will go into this. Such as assets and seasoning value.
Lenders require that you have 6 months of reserves for the subject property. Those reserves must have been in your account for the last 60 days. In addition, some lenders are starting to require several months of reserves for investment properties already owned.
You mentioned that you will be buying properties and rehabbing them. You’ll probably be expecting a higher appraisal value when finished so the length of time it takes to rehab and refi will play an important part. Most lenders will make you wait for 12 months to use the new value. Some lenders 6 months, several at 3 months, and almost extinct but still availble no seasoning.
Also your landlord history may be reviewed as well. Lenders have made some timely changes to adjust with the market so be sure to work with a nationwide mortgage planning consultant who specializes in loans such as these and has kept up with those changes.
I have a couple of clients that I do work for in MA in a similar situation. I recently did two properties for one of them and it is pssible to get these done with your scores. Just be diligent in your research.