Investor's Loan Guide by Graham W. Parham

Recommendations

Info

financial reserves subject to the minimum borrower contribution requirements below. Gifts are NOT allowed on an investment property. Good News Non-Liquid funds can be used for reserve requirements.” • IRA’s • 401K’s • SEP Funds Fannie Mae now will allow for 100% of the Non-Liquid funds, not 60% Freddie Mac currently has different guidelines than Fannie Mae. Funds for Closing This portion of the mortgage process is often misunderstood. It is important to understand that NO portion of the down payment can be borrowed. This is actually a question on the loan application. We are required to verify the source of the cash to close and at least six months of house payments in reserve for each property owned. The obvious source of verification is from the borrower and co-borrower’s last two-month account statements. If these statements reflect large and unusual increases over these two months it will be necessary to document and explain the “source of the deposits; these deposits cannot be from borrowed funds. Although the source of funds cannot be borrowed for an investment property transaction, the seller is allowed to contribute up to and no greater than 2% of the sales price for closing cost and reoccurring charges. Be careful with this because another 3 rd party interest may be contributing something toward the transaction which could influence the 2% cap. 27
The Underwriting Stage The criteria for underwriting a mortgage loan involves several parts: • Credit History – Borrower and Co-borrower credit history including credit scores. • Income to Debt Ratios – Combined-stable gross incomes of borrower and co-borrower as a percentage of combined borrower and co-borrower’s debt. • Property Appraisal – An independent fee appraiser will prepare a Uniform Residential Appraisal Report (URAR) • <strong>Loan</strong> to Value – What is the percentage of the loan to the value of the property • Landlord Experience – Length of time the borrower has owned rental property • Funds to Close – Must be borrower or co-borrower’s own funds, cannot be borrowed funds. • Clear Title on the subject property Your Credit History The Borrower and Co-borrower’s credit history should demonstrate their past willingness and ability to meet their credit obligations. This will enable the lender to draw a reasonable conclusion about their commitment to making payments on the new mortgage obligation they are going to agree to pay. In addition to credit history, credit scores are of equal importance in making the decision for this part of the mortgage process. Federal National Mortgage Association (FNMA, aka Fannie Mae) and Federal Home <strong>Loan</strong> Mortgage Corporation (FHLMC, aka Freddie Mac) both require a minimum mid credit score of 620 to qualify for their particular agency loan. 28
Page 2 and 3: INVESTORS LOAN GUIDE A Beginner’s
Page 4 and 5: Table of Contents INTRODUCTION ....
Page 6 and 7: WHY IS MORTGAGE LENDING SO DIFFICUL
Page 8 and 9: o Legal Benefits ..................
Page 10 and 11: Frank bill was introduced with even
Page 12 and 13: What Types of Loans are Available f
Page 14 and 15: focused on the long-term loans, whe
Page 16 and 17: secure direct fax, or upload all th
Page 18 and 19: Assets to Close • 2 months statem
Page 20 and 21: What would cause that? An incorrect
Page 22 and 23: Once our setup team has completed t
Page 24 and 25: Using Funds from a newly formed LLC
Page 26 and 27: 1. If a borrower has 2-4 financed p
Page 30 and 31: Your Credit Score Before lenders de
Page 32 and 33: This part of the mortgage loan proc
Page 34 and 35: • Qualifying you for certain term
Page 36 and 37: include: • Errors or omissions in
Page 38 and 39: to help ensure the client receives
Page 40 and 41: available via phone at the time of
Page 42 and 43: Why is Mortgage Lending so Difficul
Page 44 and 45: ackward and forwards, and I still c
Page 46 and 47: many of the lenders will put the br
Page 48 and 49: What about Capital Expenditures? Ca
Page 50 and 51: What does that mean to the borrower
Page 52 and 53: Price $150,000.00 $150,000.00 Diffe
Page 54 and 55: Real estate investors who are buyin
Page 56 and 57: Examples of Renovations that Qualif
Page 58 and 59: Understanding a 1031 Tax Exchange A
Page 60 and 61: Finally, certain types of property
Page 62 and 63: Mortgage Boot The second fundamenta
Page 64 and 65: Costs specifically related to the f
Page 66 and 67: Using a Power of Attorney A power o
Page 68 and 69: If you are living abroad and trying
Page 70 and 71: Why Put Your Rental Properties into
Page 72 and 73: eside in even if your LLC is set up
Page 74 and 75: What are Turnkey Properties? In sim
Page 76 and 77: market conditions, disposing of uns

Investor&#039;s Loan Guide by Graham W. Parham

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?

Investor's Loan Guide by Graham W. Parham