Need Opinoins On Re-financing And Investing
I just got approved for a no doc re-finance where I will pull out $25,000 at 6 7/8% for 30 years. I currently have 17 years left on my mortgage with a ton of equity, but I didn't want to pull out so much that my payments would skyrocket. I'm not too pleased about the 30 year thing, but I figure I'll just have to hustle harder to get it paid off sooner. I plan to use the money to finance the purchase of some investment property, preferably a duplex or triplex. So far, because I need a no-doc, the only investment loan I could get approved for required 25% down. I turned that down. It was like that because of a crazy credit card company. I have good credit. I feel I should be able to get a no-doc investment loan for less of a down payment. Opinions?
On another note, I am working with someone who also wants to invest, but has little cash. He has a home and several acres of useless land (by useless I mean, he's limited as to what he can build there). He went to a lender and they told him he didn't have enough cash flow to get an investment loan. Both he and his wife have excellent credit and are not afraid of rolling up their sleeves and doing the hard work. Any suggestions?
no doc noo loan is very hard to come by. I don't know any lenders have the program like that. If you find it. let me know. Can you go stated or light doc? You chances of getting stated or light docs are pretty good. Also if you have a lot of equity for your primary home, you can get an equity line pretty easily at prime (4%) or slightly above with no closing cost, and you can use the money to purchase an investment property.
About your friend who got turned down because supposely he doesn't make enogh money. I got an idea. What about buying an investment property with a tenant already living in it. As long as mortgage is coverd by the rent, he should get qualify for it. The lenders only give you 75% of rent, when they calculate cash flow from the investment property though. (Net cashflow=75% of gross rent - mortgage PITI) Or he can always get stated loan as long as he has good enough credit.