Let me be specific: I have 130,000$ cash, but am unemployed. I received this money as an inheritance. I intend to buy a house with several floors and tenants. Is a mortgage possible in my case? My intention is to at first keep payments going for the mortgage through the revenue generated by the tenants. This will give me the time to get a new job. Would a bank accept this case despite my being unemployed?
2007-07-03 13:48:14 · 8 answers · asked by Mike 4 in Business & Finance ➔ Renting & Real Estate
What you are looking for is called a "No Doc" loan. Under "no doc" you will not be asked to provide income/employment info. The basis for approval on this type of mortgage is your good credit and substantial down payment. Since you will be providing little evidence that you can repay the loan, the loan is considered a higher risk. You should expect to pay a higher rate and put a larger down payment than normally expected, to offset this risk for the lender.
Since you didn't mention prices in your area, it is difficult to get an idea of how far the $130,000 cash will take you. Lenders look closely at LTV (Loan to Value = loan amount divided by lesser of value or purchase price) ratio. This is essentially your equity position. The lower your LTV, the lesser the perceived risk to the lender. Your LTV and credit score will determine if you qualify for a mortgage and at what rate.
Find an experienced mortgage broker in your area that has a expertise with many lenders. Let him/her know up-front that you are looking for a "no doc" loan and that you have a substantial down payment.
You mentioned that you are looking for a large house. Keep in mind that the typical mortgage broker only deals with 1-4 unit dwellings. So if you are looking for 5+ units, this will be considered an apartment and you will do best to contact the commercial lending department of your local bank or credit union for assistance.
2007-07-03 14:14:46 · answer #1 · answered by LoveMyKids! 2 · 2⤊ 0⤋
I've been out of the mortgage business for a few years so some of the rules have changed - but here's my take.
As a former mortgage loan officer, if my memory serves correct, some lenders will offer this type of "no doc" loan, however, only on a 1 to 2 unit owner occupied property.
This doesn't sound like the case as you say "several floors" of tenants. If it is, your credit must be excellent and be ready to make a significant down payment. Also, DO NOT expect your interest rate to be pretty. From the lenders perspective, everthing is based on risk. The higher the risk, the higher the interest rate. This type of loan is a risky loan for the lender, therefore, the rate will be high!
2007-07-03 21:41:49 · answer #2 · answered by Anonymous · 1⤊ 0⤋
I noticed that a lot of the answers mentioned a "no doc loan" but it all depends on the type of property that you are purchasing. Anything more then 4 units is considered a commercial property and is NOTHING like a residential loan. I have been a Mortgage Broker and a Mortgage Processor for almost 9 years now. A lot of commercial lenders do not offer a "no doc loan". That is a program that a lot of residential lenders offer.
Not only do commercial lenders look at your credit score, job employment & assets but they also check to see what type of experience you have in the type of business you're purchasing. A person can't wake up one day and go to the bank and say "today I want to open a hotel & I have money but would like you to let me borrow the rest". Unfortunately it's not that simple.
If you have previously managed properties, you have a really good credit score (like a 760 or higher), you have owned a home and have atleast 3 tradelines (example: credit cards, car note, mortgage notes) on your credit that have been open for more then 24 months and are a minimum of $5000.00 each then you stand a good chance of pre-qualifying for a commercial loan. Talk to several different Mortgage Brokers and explain to them you're scenario. They will be able to advise you on what they think they can get you with their lenders. Good Luck!
2007-07-03 22:22:08 · answer #3 · answered by Suzy_305 3 · 3⤊ 0⤋
Since you will be buying a multi-tenant investment property, you may be able to get the mortgage even though you are unemployed. Then income from tenants will help qualify you. If you were talking about a single family home just for yourself, I would say chances are slim.
2007-07-03 21:06:37 · answer #4 · answered by Brian G 6 · 1⤊ 0⤋
Beware of mortgage companies as they are not playing fair and can get you into more trouble. Also don't tell everyone and their uncle that you have that amount of inheritance money. Even to the mortgage companies as they can and will use it against you.
They are going to tell you to get a full time hourly position and may want you to purchase the building by paying cash. You will have instant equity and they will base everything on the purchase price.
2007-07-03 21:01:51 · answer #5 · answered by Anonymous · 1⤊ 0⤋
Anything's possible in this world. Just look for the right broker or lender - it just might not be a bank, that's all. Good luck !
2007-07-03 20:52:22 · answer #6 · answered by ElleCeleste 2 · 0⤊ 1⤋
yes. your assets count for something. you can get a loan that does not require income verification. but you need to have a good credit rating, otherwise it is much harder.
2007-07-03 20:56:03 · answer #7 · answered by KJC 7 · 1⤊ 0⤋
Not with a reputable lender.
2007-07-03 22:17:28 · answer #8 · answered by kbemje2000 1 · 0⤊ 0⤋
with 30% down you could make it work.........
Hard Money......
You can go NO DOC.....but not stated or no ratios, for you are not employed. (Prime and/or subprime)
2007-07-04 00:09:26 · answer #9 · answered by ron d 3 · 2⤊ 0⤋