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I am currently buying 5 homes on land contract, 4 are rentals and have been for 4yrs. I am considering financing via a bank going conventinal Mort. by 2015 and have a couple questions.
Back Ground:
Self employed 6 yrs, rentals for last 4yrs, are all on my tax returns plus a seperate business of 6yrs.
I know DTI will be a factor. What is max Front End, Max Back end DTI's %'s allowed?
Rents are deposited in two 2 seperate chaecking accounts in 2 states. It wont be hard to provide copies. Seperate business is ran online with payments going into my Pay Pal account, I have been saving statements as well.
What other items or challenges am I up against that I need to make sure I am ready for?
Inquires on my CR will be down to 3. How much Cash on Hand should I have set aside for closing, appraisal and such?
Thanks for any input!
This won't work as a conventional (fannie/freddie) mortgage
small community bank or land bank might help you.
i have no clue what score/dti requirements are.
Can you elborate why it wont work going with a conventional type mortage? is it because its not primary residence?
Edited to add: Since I am a NFCU member and they do Investment property, I am assuming they would be a good source to finance these through then, Correct?
conventional will do a multi-unit property. duplex. fourplex.
but not 5 houses on a piece of land
unless i misunderstood the question. you are buying 5 houses on a piece of land?!?!?!?!?
5 homes on 5 seperate peices of land. Each has its own mailing address, property taxes etc.
@ktl72455 wrote:5 homes on 5 seperate peices of land. Each has its own mailing address, property taxes etc.
Dallas, isn't there a limitation to the number of properties any one individual can finance with Fannie Mae?
I found this Fannie Mae announcement for investment properties. I don't know if this is the most recent or not so Dallas or Shane please check to make sure the information is correct. Here is the link direct to fanniemae.com https://www.fanniemae.com/content/announcement/0902.pdf
Are the land contracts recorded?
If so, then this could work out with conventional financing... investment properties require 15% down, primary you can do with 5% down.
Debt ratios would likely be 45% for front/back. 6 months PITI in reserves needed for each financed investment property, no reserves should be needed for the primary residence (although automated underwriting may condition you for 2 months PITI in reserves).
Freddie will finance up to 4 investment properties, Fannie will finance up to 10 (with additional restrictions after the first 4).
Only the buyer/seller have copy's of the land contracts. None are recorderd at the court house. But will be at the end of the contract. I suppose if need be, they could be recorded now. I'm not sure how hard or easy it is to do, maybe its something I need to check into.
I have noterized contracts and have been making payments on each for 3 & 4 yrs now with reciepts for each payment made.
@ShanetheMortgageMan wrote:Are the land contracts recorded?
If so, then this could work out with conventional financing... investment properties require 15% down, primary you can do with 5% down.
Debt ratios would likely be 45% for front/back. 6 months PITI in reserves needed for each financed investment property, no reserves should be needed for the primary residence (although automated underwriting may condition you for 2 months PITI in reserves).
Freddie will finance up to 4 investment properties, Fannie will finance up to 10 (with additional restrictions after the first 4).
just to clarify... 6mo on all investments or just the ones I am having a bank refinance to pay off the land contract?
Example I have 5 but only want 2 financed in june of 2015.
Thanks!
i don't know specifics in your case, but in our case, we are buying a new house and have an investment property. we are required to have 6 months reserves for the home we are purchasing AND 6 months reserve for the investment property.
it may be different with a refi, and it may vary by lender.