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Met with the mortgage lender today

April 27th, 2016 at 03:11 pm

It is going to be harder this time around to purchase a property. Some of it has to do with changing regulation and some of it because of changes we've made in our lives.

Background: We want to buy an investment property a couple of blocks away from our primary home. It is plot with two structures on it-one structure is a two bedroom house and the other is a 1 bedroom almost tiny house. We think that we can rent it out (once a little work is done to it) for enough for it to pay for itself and the mortgage and property taxes of the primary residence. It shouldn't take too long to get it to be cash flow positive.

The news today:

First, we can't count AirBnB income until next year. We need to have two years of it on our tax returns. Oh well.

Second, the way student loans are factored in have changed. When we bought our house in January 2015, they just used the monthly payment to figure it out. My partner's IBR payment was about $70/month, I believe. Right now it is $0 because he only works part time. But, they have to use 1% of the total loan-about $900-as a monthly payment. That is ridiculous.

Third, our work histories. Partner's income can't count because he only works part time and has only done so for 6 months. I think he needs 1-2 years before they'll count it. I want to quit my part time job, but I haven't been at my full time for a full year yet. Though, I have strong work history, no gaps at all so that helps.

We're looking at seeing if we can do it in just my name, because we were already planning on moving the property to an LLC (private borrowers getting better interest rates than LLC borrowers) once we make a couple of payments.

My partner wants me to quit my job and then we'll work on getting in a better position to get a mortgage for an investment property. But, if we wait I still might not be able to qualify on my own without that extra income. If I stay for 2 more months (estimate) then I should be able to qualify on my own.

It is all a little ridiculous to me because I have more cash liquid than the property costs, but obviously don't want to put all my eggs in one basket. I am glad there are tighter mortgage rules but this seems harder than it needs to be.

We have a lot to talk about. If I stay at the public library for 2 more months that's almost 2k more, which I can put towards debt to help with my credit score which will help with the interest rates. It sucks because I don't want to stay any longer. But I think it might be worth it to get a place that will go a long way in furthering our financial goals.

So much to consider!

2 Responses to “Met with the mortgage lender today”

  1. raul holder Says:


    Admin, if not okay please remove!

    Our facebook group “selfless” is spending this month spreading awareness on prostate cancer & research with a custom t-shirt design. Purchase proceeds will go to cancer.org, as listed on the shirt and shirt design.

    www.teespring.com/prostate-cancer-research

    Thanks

  2. FrugalTexan75 Says:

    It does stink, but you have to weigh the potential benefits/costs of each choice - quitting now and waiting longer to get an investment property, or waiting a few months to quit, and cracking at the debt and possibly getting the house you're wanting. Which is more beneficial? Which has more cons?

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