Mortgage/financing quesitons - Posted by BlueAngel

Posted by BlueAngel on September 07, 2003 at 15:11:03:

Thanks James! Also I often hear investors refinance to cash out as tax-free money for next investment, so when I take out a 80% loan for example, the 80% is based on the FMV of house, not my purchase price, right?

I always thought it’s based on the FMV, until I saw this one from Q&A of a lender’s site.

Q: If my property’s appraised value is more than the purchase price can I use the difference towards my down payment?
A: Unfortunately, if you are purchasing a home, we’ll have to use the lower of the appraised value or the sales price to determine your down payment requirement. It’s still a great benefit for your financial situation if you are able to purchase a home for less than the appraised value, but our investors don’t allow us to use this “instant equity” when making our loan decision.

Now I’m rather confused.

Mortgage/financing quesitons - Posted by BlueAngel

Posted by BlueAngel on September 06, 2003 at 21:18:47:

I’d like to seek your advice on loan approval process for investment properties.
a. If I apply 95% to 100% financing for investment properties, what factors do lenders based their decision on? My credit and income, or cash projection of loans? I often heard of non-qualifying and no doc loans, assuming high interest is not a problem, what are the usual paperwork involved? What source would you recommend?
b. How long do they usually get approved? I have okay credit and all my income come from rentals. It’s easier to get a loan when I have the purchase contract in hand, however, I am concerned that the loan not approvd before the closing date.
b. What about the closing cost when I buy a deal, can that be rolled into the loan or do I pay up front (I’m in northern cal.)?

Re: Mortgage/financing quesitons - Posted by James Strange

Posted by James Strange on September 07, 2003 at 02:27:06:

On 100% loans you will need all kinds of paperwork. You will also need great credit and some cash in the bank.

95% you can start to drop some of the paper work.

The better your credit and the more cash you put into the deal then, you can get buy with less paperwork untill the documentation that you have to show almost goes away.

As for rolling in the closing cost it all depends upon the lender and the type of deal.

Regular lenders base the deal on you. Hard Money lenders base the deal on the deal.

James Strange