Investor's Loan Guide by Graham W. Parham

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Table of Contents INTRODUCTION ........................................................................................... 8 WHY SHOULD I GET A LOAN FOR MY INVESTMENT PROPERTY? ......... 10 • Why is Your Return Better when using Leverage? .................. 10 • What is an Investment Property Loan for Residential Properties? .................................................................................... 10 WHAT TYPES OF LOANS ARE AVAILABLE FOR RESIDENTIAL MORTGAGE LENDING? ........................................................................... 11 • Conventional Loans .................................................................... 11 • Portfolio Loans .............................................................................. 12 • Private Money Loans (Hard Money) ......................................... 12 • Non-Recourse Loans (IRA Loans) .............................................. 13 GETTING STARTED WITH INVESTMENT PROPERTY LENDING .................. 14 • The Application ............................................................................ 14 • The Documentation Stage ......................................................... 14 o Employment / Income ....................................................... 16 o Self Employed Borrowers ................................................... 16 o Assets to Close .................................................................... 17 o Documents that may be required ................................... 17 o Personal Identification ....................................................... 18 o Documentation for Investment Properties ...................... 18 • Processing ..................................................................................... 18 o Salaried Paid Employees ................................................... 18 o Self Employed Borrowers ................................................... 19 o Social Security and Retirement/Pension Income ........... 20 • Validating Assets ...................................................................................... 21 3
o Business Accounts ............................................................... 22 o Earnest Money Funds .......................................................... 22 o Using Funds from a newly formed LLC Account ............ 23 o Can I use my HELOC for funds to close? ......................... 23 o New Fannie Mae reserve requirements for investors with multiple properties owned ................................................. 24 o Can I use Gift Funds for my Investment property loan? 26 o Funds for Closing .................................................................. 27 • The Underwriting Stage ............................................................... 28 o Your Credit History ............................................................... 28 o Your Credit Score ................................................................ 29 o Debt to Income Ratios ........................................................ 30 o Loan to Value Percentage ................................................ 31 o Property Appraisal ............................................................... 32 o Borrower’s Landlord Experience ....................................... 33 o Clear Title on Subject Property .......................................... 34 The Title Search ............................................................... 34 The Owner’s Title Policy ................................................. 34 o What is TRID? ........................................................................ 35 • The Closing Stage ....................................................................... 37 o Pre-Closing ............................................................................ 37 o How Long Will Closing Take? ............................................. 38 o Where Will the Closing Be and Who Schedules it? ........ 38 o What to Bring to Closing .................................................... 38 o How does a Mobile Notary Work? .................................... 39 • Funding .......................................................................................... 39 SPECIAL NOTE ........................................................................................... 40 4
Page 2 and 3: INVESTORS LOAN GUIDE A Beginner’s
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 28 and 29: financial reserves subject to the m
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
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Investor's Loan Guide by Graham W. Parham