Mortgage News

Home Buyer Q & A

June 5th, 2012

  • We want to refinance one of our investment properties.  We own five rentals plus our home.  We own three of them outright and have mortgages on the others plus our home.  We were told we had too many properties and could not refinance, is that true?  If you only have three mortgages on the properties, then you are fine to refinance.  The limits placed by FNMA do not apply to properties owned, it applies to number of mortgages on properties owned.  The limit used to be ten, this of course with the economy, has changed.  But some investors have guidelines that indicate you can have so many mortgages with them, so this helps in working with any issue where number of mortgages is in question.             
  • I want to buy a home.  I have VA eligibility, and I want to keep my payment around $1000/month.  What would my purchase price be?  To find that answer, we basically work backwards.  We do have to make some assumptions, the biggest of them being estimating monthly taxes.  Your taxes are dependent upon municipality - their tax rate and tax assessed value of the property being purchased.  Insurance is another question mark, we can make a general assumption but cost of coverage is dependent upon carrier and policy particulars.  Backing into a figure, you are looking at roughly $150,000 to $175,000 in purchase price.  As you narrow your search, it is good to check back to make sure we are maintaining your parameters.                
  • We are interested in purchasing a property.  It is a new home currently under construction.  We do own our existing home, and we are upside down.  We owe about $200,000 and it is worth $190,000 roughly.  We believe we would like to keep and rent it out.  The existing mortgage is VA, we have about $25,000 to put down on the new house, purchase price is $450,000.  What are our options for financing the new house?  You have roughly a 5% down payment.  If you went conventional with 5% down, the loan amount is in excess of conforming limits ($425,000), so you would actually need 10% down.  FHA is a possibility, but in this price range, your mortgage insurance would be substantial.  However, if FHA fits your credit criteria and is a good option for you, then we may have our answer.  The biggest opportunity I see would be to review how much you are upside down.  If you use your existing funds to somewhat right the equity in your home, and we could refinance without using all of your cash.  We could then look at placing your VA eligibility against your new home.  Your down payment would be minimal.          
  • We want to refinance.  I do have VA eligibility, and our existing loan is not VA.  The problem is that we owe about what our home is worth.  Everyone keeps telling us that we can only borrow 90% of the appraised value, is this true?  Generally speaking, no, we have a program that allows you to refinance 100% of the appraised value of the property provided you are paying off existing debt.  If there is enough room after appraisal to roll in closing costs, you can.

- Jennifer Keenan, Senior Mortgage Consultant, NMLS# 101837, Tidewater Home Funding 757-366-8690