Tag: investment property (Page 2 of 3)

Announcing New Investor Specific Financing Options

July 28, 2022 / Tom Bonetto

I’m glad to announce that we now have investor specific financing options in the residential income producing space…both long-term and short-term financing available, ranging from 1 to 20 units.

silver macbook beside white pen on black table

These products are tailor-made for real estate investors with income producing properties.

Finance of America Commercial, a division of Finance of America Mortgage LLC, provides individual and business exposure limits with individual FIX & FLIP rehab property loans, along with BRIDGE loans, NEW CONSTRUCTION loans, and SINGLE & PORTFOLIO RENTAL term loans to residential real estate investors across the country.

These offerings have helped clients overcome traditional financing hurdles and build long-term wealth through real estate investment.

These specific lending products and tools are designed with the real estate investor at the forefront – to help provide the personalized service investors need.

Income Producing Property/Portfolio Loans – 2 to 20 units

30-year term available
Full amortization and interest only options
Loans from $200K to $5M
Funding up to 80% on purchases and rate/term refinances

Fix and Flip Loans

Funding up to 95% of acquisition and rehab costs
Max loan-to-value 75% based on ARV
Interest accrual on drawn balance
12- and 18-month term options

Bridge Loans

Individual property loans up to $3M
Funding up to 80% LTC on multi-family
Payoff other loans or lenders on completed flips or new builds
Ideal for light rehab flips when self-funding cosmetic rehabs

New Construction Loans

12–18-month term for build ready lots in urban locations
Funding up to 100% of construction budget and 80% LTC/65% LTV for multi-unit
Funding up to 90%/75% LTV for experienced builders (conditions apply)
Business purpose loan with no income requirements

Options with FACO and Eligible Properties

Would you like to find out more? Contact me to discuss your current situation and how you might be able to take advantage of these fantastic financing options. It would be my pleasure to help you!

Owning Investment Property: A Primer For First Timers

August 9, 2021 / Tom Bonetto

assorted color wall paint house photo — Photo by Jessica Bryant on Pexels.com

Owning investment properties can be a great way to earn extra income. I’m linking today to an article from Peter Warden at The Mortgage Reports on a fantastic article for would be real estate investors.

Whether it’s a career choice or an extra source of income, becoming a landlord requires hard work, knowledge, and time. The idea of rent collection as a source of passive income attracts many new landlords to this profession.

But experienced landlords know this job requires an active approach. The more you work to maintain properties, find the right tenants, and keep track of all the details, the more successful you can be.
Peter Warden, The Mortgage Reports

This article isn’t a quick read – it’s quite in-depth and I invite you to read the entire thing here.

He breaks down the article into 10 sections:

What to know
Getting started
Financing a property
Work involved
Planning ahead
Hiring help
Legal issues
Finding tenants
Evicting tenants
Forms for landlords

Many of my clients have found that owning rental property is one of the best financial moves they ever made.

At the same time, owning rental properties isn’t easy and involves a good deal of effort. However, the financial rewards can make all that worthwhile!

As Warden states, “True, owning a rental property rarely makes people rich quickly. But getting rich slowly is a very attractive alternative.”

What’s the first step? Doing the research on how to make a rental property purchase. Do reach out to me for more, as it would be my pleasure to help on the financing side.

Second Homes and Investment Properties – New Regulations and Rates

March 22, 2021 / Tom Bonetto

Fannie Mae and Freddie Mac are tightening the underwriting criteria for second homes and investment properties. They will also begin to limit the number of these mortgages that they will acquire.

“Recent amendments to our senior preferred stock purchase agreement with Treasury impose additional risk criteria on the loans we acquire,” the Government Sponsored Enterprise said in a letter. “One of those restrictions is a 7% limit on our acquisition of single-family mortgage loans secured by second home and investment properties.”

This means that non-owner occupied transactions (2nd homes and investment properties) will become a bit more difficult in terms of qualification and slightly more expensive, in terms of interest rates.

Lenders are now being forced to add to the cost of the loan and raise interest rates – anywhere from 50 basis points to as high as 250 bps. That can mean an increase in rate of 1/8% to 1.25%, depending on the investor.

Finance of America, my employer, has added 50 basis points for all 2^nd home and investment property purchases and refinances. This is on the low side, relative to many in the industry, as others that I’ve spoken to have added as much as 250 bps.

From Investopedia: “Basis points, otherwise known as bps, are a unit of measure used in finance to describe the percentage change in the value of financial instruments or the rate change in an index or other benchmark. One basis point is equivalent to 0.01% (1/100th of a percent) or 0.0001 in decimal form.”

Don’t hesitate to contact me for more information to see how this might impact your upcoming purchase.

March 2021 Mortgage Rate and Market Update

March 15, 2021 / Tom Bonetto

typewriter — Photo by Markus Winkler on Pexels.com

As inflation rises, it typically causes mortgage rates to move higher as well. That’s because inflation is the arch enemy of interest rates, since it erodes the buying power of the fixed return that a mortgage holder receives.

While inflation may look tame to everyone at this time, that looks like it will change when you dig a little deeper.

Inflation Fears

But in the coming months, the inflation levels are expected to rise significantly, as the readings for the more current months replace the extremely low numbers from 2020.

A look at the closely watched “Consumer Price Index Core Rate” of inflation, which strips out the volatile food and energy sectors, shows a current reading of just 1.3% inflation for the past 12 months. This has helped interest rates remain low.

It’s quite possible to see the rate of inflation rise towards 2.5%. It’s likely that this will influence interest rates to higher levels.

For borrowers, the good news is that inflation is likely to become more tame later this year. So now may be a great time for you to take advantage of the low-rate environment before these inflation readings start to move higher.

Secondly, our central banks have artificially depressed sovereign bond yields for years. Now, a small rise in yields can cause a move higher in interest rates, as well.

2nd Home and Investment Properties

Finally, Fannie Mae is tightening the underwriting criteria for second homes and investment properties, the government sponsored entity said Wednesday.

“Recent amendments to our senior preferred stock purchase agreement with Treasury impose additional risk criteria on the loans we acquire,” the GSE said in a letter. “One of those restrictions is a 7% limit on our acquisition of single-family mortgage loans secured by second home and investment properties.”

This means that non-owner occupied transactions (2^nd homes and investment properties) will become a bit more difficult in terms of qualification and slightly more expensive, in terms of interest rates.

Use That Equity

One other thing to consider for current homeowners – a cash-out refinance to utilize the equity in your home to eliminate all other consumer debt. Many of my clients have saved anywhere from $500 to $1,750 per month in their overall payments. Find out more on that here…and do reach out to me for more on this subject!

Now Is A Great Time To Refinance That Investment Property

June 25, 2020 / Tom Bonetto

Mortgage rates are at all-time lows. Many homeowner’s are taking advantage and locking in for the long term. But what about investors, are they doing the same?

Refinancing rental properties can unlock a good deal of wealth-building opportunities for investors, including the ability to lower interest rates and monthly payments, improve loan terms, and earn additional cash flow.

Interestingly, many investors have not taken advantage of today’s market.

For one reason or another, there are a number of investors that don’t even realize the opportunity that’s in front of them.

Should I Refinance My Rental Property?

In most cases, investors should consider a refinance to:

Lower the mortgage rate

Take cash-out to purchase new investment properties

Convert from an ARM to a fixed-rate

Turn a hard money loan into a conventional one

Pay off the loan more quickly

Upgrade a current investment property

Much has changed in a relatively short period of time regarding rates and valuations…and they are almost all in favor of the investor.

As mentioned earlier, interest rates are historically low…and they look a lot better than they did even this time last year, let alone a few years ago.

5.75% versus 4.5% example

If you purchased an investment property in October of last year, for example, many borrowers took on mortgages with an interest rate in the high 5% range.

Today, if that investor were to refinance their $250,000 loan from 5.75% to 4.5% for example, they would save nearly $200 per month.

There might be some discount points involved depending on the scenario, but they can be financed into the loan amount, so the only out-of-pocket cost would be that of an appraisal.

Assumptions: $250K loan, 70% loan-to-value and 760+ credit score

In Conclusion

When you own an investment property, the goal is to earn a solid rate of return…and refinancing that property can increase your short-term cash flow and help you build longer-term wealth.

Do reach out to me for more, as it would be my pleasure to help you look at different options and programs that might help you in today’s market.

Tag: investment property (Page 2 of 3)

Announcing New Investor Specific Financing Options

Owning Investment Property: A Primer For First Timers

Second Homes and Investment Properties – New Regulations and Rates

March 2021 Mortgage Rate and Market Update

Inflation Fears

2nd Home and Investment Properties

Use That Equity

Now Is A Great Time To Refinance That Investment Property

Should I Refinance My Rental Property?

5.75% versus 4.5% example

In Conclusion

Apply Now – Online Application

Schedule Appointment With Tom

Guild Mortgage

Contact Tom

About The Coach

Categories

BLOG ARCHIVES