Question: My borrower inherited the property a while ago along with his siblings. They are all on title with one another. My client wants to buy out the other siblings with the new mortgage. Would this be allowed as a non-cash-out refi.
Answer:
So a quick distinction, whenever you pull out Equity from a home is considered a cash-out refi when it’s ever more than $2,000. You can include closing costs and things like that but any debts being paid off or even a second mortgage (unless it was used to purchase the home) would then be classified as a cash-out refi. This is one of the exceptions to the cash-out rule! One of the kids can cash out the other siblings without the hit for being a cash-out loan. You can actually do that as a non-cash-out refinance. Many loan officers don't realize that. So why does this even matter? Simply the rates are better!
Question: I have a client that is an attorney and she has been with her Law Firm for several
years as a W-2 employee. She recently became a partner and now is receiving partner distributions. She is less than a 25% owner however she does get K1 income. If I have a partner agreement detailing her equity in a partnership, am I able to use the Income
Answer: Yes you can! Typically you need 2 years whenever there’s K1 income but in this scenario and because of the job history with the employer, they do allow the guarantee payments from a partner to be used as income. This isn’t just for attorneys. There are people that go from W2 to ownership or 1099 so there are guidelines that allow this income change to be used.
Question: How do I know if I have an FHA mortgage?
Answer: FHA is a totally different loan as far as guidelines and even different forms so you can look at your original paperwork that will show FHA on many of the documents. You can also ask your Loan officer or the servicer of the loan. Another trick is to check if there was upfront mortgage insurance that was added to the loan making the loan amount a more random number. FHA loans also have Mortgage Insurance and an FHA Case number. That is another way to check if it’s an FHA loan.
Question: Where can I find a 10-unit apartment for sale?
Answer: Whenever you have more than four units, even if it’s a residential building, it’s considered a commercial loan. I would talk with a commercial real estate agent for his type of building.
Question: What's the difference between a mortgage broker and a mortgage banker?
Answer: A broker typically takes the loan and has a bunch of different relationships with other wholesale lenders so they don’t underwriter or fund the loan in their name. They also shop for different lenders and guidelines to fit any particular client. They will know what lenders will take different clients needs from credit score, to debt ratios, to property types and uses. A mortgage banker will have more of those products in house and will fund and underwrite that loan. The loan can be pooled with other loans and sold or serviced by other mortgage lenders. It really comes down to who is funding the loan.
Question: How can you tell if a house is bank owed property?
Answer: With bank-owned properties, they have different listing agents that have different notices in the window when selling the properties. Check with the agent that is listing the property. If you are checking on a home already bought you can check the chain of title with the
title company to see if the home was ever bank-owned in the past.
Question: Where would I start the process of purchasing a home through a private mortgage
lender?
Answer: I start with an attorney, broker, or agent and get some history of who the owner is to start to make an offer. You can still use a real estate agent once you find out if the privatenmoney lender is the owner and has foreclosed on the home or if there is a different owner that you will need to track down.
Question: Can I sell the house and the mortgage with it?
Anwer: Genderally no. Most loans are not assumable and once you try to change ownership, the note would be called due. FHA loans do have an assumable feature but most loans do not.
Question: Would adding a deck add more value to my home?
Answer: It really depends. Some people will want a deck and some don’t or may want it done a different way. Customization usually costs more than the added value they bring so it’s more about getting the use you want out of the house than really adding short-term value to the home for the next owner.
Question: How much money should I have saved before buying my first home what are some ways to save money faster and efficiently without sacrificing too many things in life
Answer: There are plenty of programs that don’t require as much money down, even a hundred percent financing, and generally speaking I think it’s better to take the savings and pay off other debts with it and go with less to little money down. 10,000 down on a mortgage may not go as
far as 10,000 toward other debts. Plus having the money for savings can be a smarter option.
For the second part of the question, there’s always a balance. I have found in my life the more I minimize, the more I separated needs and wants, and the more time I give myself on purchases the better I’ve always been. I’ve been through a bit of a Renaissance of Minimizing I try to a
little more use of everything I have and just see where all my money is going. I think tracking is a crucial part in finding where your money is going and it because easier to save! Our society is all about buy buy buy. All the commercials you see are scientifically designed to get you to
spend and they are really good at it. From the lighting to the colors and sounds they use are all designed to get you to buy. Give your self little buffer between you and your money and give yourself a little bit of time and you will see your savings increase along with your peace of mind.
Once you start you will be more excited about saving than spending!
