Trying to refinance an investment property but debt/income may be an issue. Help!?!?
So here is the situation. She has 3 properties:1. Primary Residence in Germantown, MD owes $232K @ 4.25% (home worth $500,000). Has HELOC available at 3.24% up to $100K2. Rental property in Rockville, MD owes $225K @ 6.5% (home worth $500,000)3. Rental property in Raleigh, NC owes $359K on 1st mortgage @ 4.375%, $175K on Home Equity Loan at 7.75% (home only worth $450K max)We would like to refinance her Rockville property and pull out $150K out of it to pay off her Home Equity Loan in NC (drawing on her primary residence HELOC for the rest). We would be interested in then refinancing her Raleigh 1st mortgage. She has an over 800 credit score.The problem is that she just started renting Raleigh for $2700/month two months ago. She has had Rockville rented for $2700/month for quite awhile but she spent a lot on improvements in 2011 so she doesn't show much income from this on her 2011 taxes. She has not filed her 2012 taxes yet (extension I believe).She is retired so she has $3390 and $2319 in pension/social security respectively a month. She has approximately $49,000 in a brokerage accounts and $280,000 in IRA retirement funds. She is over 70.5 so she has to take MRDs. I think the problem we ran into was getting the rental income to help. But she does have the retirement and brokerage funds that I would hope would help. Also, we would pay off her home equity on NC which would help. She is paying over $1000 in interest that she doesn't have to because of exorbitant rates and it's really hurting her. Can anyone help? We need a creative solution. by justsukayrah from Rockville, Maryland. Apr 30th 2013
Dave Metsker (DaveMetsker)
#35 ranked lender in Oregon - 2,318 contributions
Please contact me at primefinancial@frontier.com. I see a way to solve this issue that no one else on the forum has seen. In my 25 years in the mortgage business, I have structured a number of creative solutions. I believe this solution will improve her situation significantly. Dave Metsker, 503-620-2239.
William J Acres (William_Acres)
#74 ranked lender in Arizona - 8,728 contributions
Your maxed out at 70% LTV on an investor owned Cash out transaction.. and with a 2 year history of collecting rent, you will be able to use 70% of the rental income for the recently rented property... all in all, you should have no problem..The best advice I can give you is to contact a LOCAL mortgage broker and apply with them. Do not use the local "Big" bank, or one of those 50 states internet lenders or nationwide lenders...By applying with your LOCAL Broker, you have an advantage because he's familiar with local customs and works with numerous lenders, seeking out the best loan terms for your particular scenario. Because he has lower overhead, he can offer you lower rates and lower fees than most of the larger lenders.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com
Steffnie Parsons (Steffnie)
#14 ranked lender in Oklahoma - 61 contributions
The rule is very firm. You must show the rental income on 2 years of tax returns. It is almost treated as self employment. I would be happy to try and help. It is hard to see what a file really is without it being on paper. If you are interested in trying call me or email me. Steffnie@peoplesbankusa.com 405-445-1091
Thanks Steffnie. This is for my mom. I'll e-mail you a little later. Would love to hear what solutions we may have.It's really frustrating that she hasn't missed a payment and refinancing will save her $1000-1200/month or more and we would run into an issue with income even though she has good reserves in retirement and brokerage.
Ken Burrows (mortgagesforamerica)
#19 ranked lender in Nevada - 572 contributions
Try these guys, they allow new rental income with an agreement and deposit: Josh MorrowAccount ExecutiveWeslend WholesaleOffice- 775-580-7378Cell- 916-233-7303efax- 916-880-5352josh.morrow@weslend.com
Joyce Ettingoff (speedlad)
#34 ranked lender in Maryland - 68 contributions
We can help you. We are in Rockville, Maryland and a branch of a New York Bank. Our company is licensed in the states where your properties are located. This should not be a problem. It will just take a bit of elbow grease. We carry many competitive products and since we are nearby we can meet with you and/or your MOM to find the best solution. Some of the rules on investment properties have recently been relaxed too.Joyce and Tony 301 915 5644In fact we could meet you today
Carlos Figueira (carlosfigueira)
#107 ranked lender in New Jersey - 199 contributions
As long as she has landlord history in the past, regardless of the amount there are products available. Might be .25% - .50% higher than market but still BETTER than your current rate. Contact one of the Lender411 loan officers that have replied and get further details.
Steven Cook (stcookmortgage@gmail.com)
#37 ranked lender in Washington - 256 contributions
One thing to be aware of is that most lenders will limit the cash out refinance on an investment property to about 70% - which would limit the amount she can pull out to about $125k. Good luck on getting this process done, with good loan officer, it should be doable.
Joe Shamie (Joe Shamie)
#4 ranked lender in New Jersey - 1,412 contributions
As long as she has a two year history of receiving income the rental income can be used. However, the two year history is proven by using the last two filed returns. If she only had rental income in 2011 and none in 2010, you should have her file the 2012 returns ASAP so you can use the rental income to qualify.
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