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> You might run into issues with qualifying because your income is on the low
> side, as you already acknowledged.
RESPONSE: There is no might about it, he will not qualify if he
followed your advice (took a 3/1 or 1/1 ARM on the existing property)
unless he went no doc.
> In any case, I suggest a 3/1 on the new property, and your choice of the 3/1
> or 1/1 on the existing property. Take both with an Interest Only note. This
> will get the payment to its lowest possible number, for two reasons. The 3/1
> product represents more risk for you, and less risk for the lender, they
> reward you with a lower rate, and the interest only has no principle
> repayment. YOU CAN ALWAYS ELECT TO ADD PRINCIPLE REPAYMENT IF YOU WANT, JUST
> WRITE A LARGER CHECK. But, you want the lowest possible payments to
> calculate your qualification. Assuming the SAME rate, 6.5%, the Interest
> Only payment will be $400, or about 20% less than the fully amortized
> payment. When the existing house is sold, then refinance the new house to a
> 30-year fixed.
RESPONSE: I suggest that consider taking a HELOC instead of a 1/1 or
3/1 in your instance because, 1) You can access the money for free
(HELOCs are no cost/low cost borrowing instruments; a 1/1 or 3/1 would
cost several thousands of dollars to access the money in your existing
home); 2) You can borrow just what you need for the downpayment with a
HELOC; some lenders impose a min. loan amount that might require that
you borrow more then you require with the 1/1 and 3/1; 3) You are only
borrowing the money on the short term (HELOCs are not recommended for
long term lending for a number of reasons that aren't important to you
because you are borrowing short term). You will be in a stronger
qualification position with only a 10-20K HELOC balance on the books as
opposed to a 30-40K 1/1 or 3/1 ARM.
Regards,
Scott Miller
National Commercial and Residential Lender/Broker
1.877.716.6495
EZMortgageLoanz@aol.com
www.RealEstate-IQ.com
www.EZMortgageLoanz.com
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Re: Ping or Calling Jeff Strickland Please Help
