After I hung up, I scratched my head wondering who was the idiot? Initally, I was shopping around for a good mortgage lender and ended up confused after listening to all the mumbo jumbo from a Wells Fargo representative. I am currently located in Seattle with plans to relocate to Chicago sometime this summer/fall. I plan to rent my current Seattle property and convert my home equity to use as a down payment for my new home in Chicago. The mortgage lender said it was not possible because I would be approx. 50% in debt if I did that. Did he make any sense? If you can suggest ideas for creative financing, it’ll be great!
It sounds like he has no concept of the term “I plan to rent my current Seattle property” and that would generate an income…
Most lenders will allow you to reflect approximately 75% of the gross rental as further income…this is predicated on the concept that you have a copy of the rental contract with you. Otherwise, a more lenient lender may talk to you if you have a realistic pro forma for the property as a rental.
Keith
This is exactly why I only deal with lenders/brokers that are investors themselves. They will know what an investor needs, where to get it and how to structure the deals.
Creative financing is great, but most of the time it is more expensive than conventional money.
One of the most important things for a small investor is to have an ongoing relationship with a progressive lender, preferably one who himself is an investor and is willing to be creative such as facilitating simultaneous closings.
Da Wiz
As of now, I don’t have a relationship with a lender since I’m brand-new in the world of real-estate investing. Are there any lenders/investors you recommend?
Holly,
I believe I already gave you the contact information for a lender. Have you tried to contact them yet?
the guy was just giving you a matter of fact answer. Sure you PLAN to rent your place after you move out, but who know long it will take to find a tenant, etc, etc. Also, some lenders will not count the income until it shows up on a SchE of your tax returns. it all has to do with the underwiting rules of the specific loan/lender’s program.
Sure it helpful to have a lender/broker who has some investment experience, but they are going to held to the some underwriting rules. Your loan is not approved by the broker/loan officer; that is done by the underwriter you reviews the file.
Yes the underwriter makes the decision, but a broker that is an investor has done loans with underwriters that actually will approve these loans and have experience with those products.
For example, just because you have a license to drive a car doesn’t mean you know how to drive a Semi-Trailer. So go to someone that has experience driving the Trailer. Meaning go to a broker that understands the investor and knows which lenders will work with investors and is able to meet their needs.
Holly, call that Bryan McDonald I sent you his information. As I mentioned, he can do loans in 47 states, which is great for me, because I invest all over the country personally.