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Lifeboy
Posts: 5
Registered: ‎02-06-2013
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Refinance new home after shortsale of old

Hi,

 

We did a shortsale of our home and then bought another one (simultanously) . After shortsale credit history shows settlement.

 

We would like to refi our exisitng home and also wanted to see if we can get loan to buy investment property .

 

Any idea what restrictions we can face . Is there a timelimit before we can refi our take out investor loan.

 

Any advice or insight will be helpful

 

Thanks in advance.

Silver Regular Contributor
sfsfr
Posts: 688
Registered: ‎04-15-2012

Re: Refinance new home after shortsale of old

[ Edited ]

You paid too much for a house, stick it to the banks and taxpayers with a short sale, and simultaneously buy another house before your credit is ruined. Now you want to buy an investment property? Let me guess, if your "investment" goes south, you will find a way to weasel your way out of that too? I seriously hope you won't be able to get a loan.

Gold Regular Contributor
sheriff
Posts: 2,223
Registered: ‎06-01-2012

Re: Refinance new home after shortsale of old

My insight is I would not want to be the bank that is loaning you money.  What you did is like a strategic default.  You had the money to pay your loan and decided to purchase a new home instead.  Now you want to refi the new house you just bought and get money to buy an investment property?

Silver Trusted Contributor
Michelle1x
Posts: 1,063
Registered: ‎02-17-2008
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Re: Refinance new home after shortsale of old

no attitude from me but you will have difficulty getting any loan for a while.   I did some financial reshuffling in 2010-2011 and this is what I discovered, an actual loan officer would be a better source though.

 

- To get a decent refi rate or new loan you need a FICO score of 720+.  You can get slightly higher rates for 680, but if your score is below 680 I wouldn't even try.  You should get your fico from myfico for $9.99 to see where you are, I have heard short sales can cause a drop of 100 pts but it probably depends on your history.  Make sure and get the real FICO score from equifax because thats what the lenders use.

 

- the short sale is categorized similarly to a heloc settlement by fannie/freddie- not a foreclosure but a negative real estate record on your credit.  This will block fannie and freddie transactions for 2 yrs, if it were a real foreclosure it would be 4 years. 

 

- as a part of the short sale you probably have lates on your credit for the short sale house.  Wells and some others will not refi any property no matter what your credit score if you have any lates on real estate from the last year.

 

- for the investment property loan they will require a down payment of at least 25% (probably higher with your credit) and the rate is typically 1 pt above primary residence loans so expect investment rates of 4%.  Lenders take 75% of the rental income as income and they are picky about DTI these days.

 

Having said all this are you sure you want to get into investment real estate now, personally I don't think this is a great time for that, too much competition - the horse is out of the barn as they say.

 

Silver Trusted Contributor
Michelle1x
Posts: 1,063
Registered: ‎02-17-2008
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Re: Refinance new home after shortsale of old

[ Edited ]

bck wrote:
You paid too much for a house, stick it to the banks and taxpayers with a short sale, and simultaneously buy another house before your credit is ruined. Now you want to buy an investment property? Let me guess, if your "investment" goes south, you will find a way to weasel your way out of that too? I seriously hope you won't be able to get a loan.

I'm going to chime in a little here.  There is no reason for an individual to think of any financial transaction differently than any business would.  Say he paid too much for a house, he should do what he needs to do to get out of it just like Tishman did on their properties.  ITs just good business.
http://blogs.wsj.com/developments/2010/01/25/tishmans-strategic-default-on-stuyvesant-town/

 

Why do you think he stuck it to the taxpayers?  The banks yes but why the taxpayers?

 

On one of my properties that I bought in the last bubble I was practically *forced* to take out a purchase money heloc.  If I did not take out the heloc, I had to pay .25% more in interest rate.  This is a type of predatory lending imho.  Then when the RE bust hit, those same banks were crying the blues about people defaulting on these helocs and demanding a bailout. 

 

Silver Contributor
MyCousinVinny
Posts: 492
Registered: ‎06-13-2011
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Re: Refinance new home after shortsale of old


Michelle1x wrote:

I'm going to chime in a little here.  There is no reason for an individual to think of any financial transaction differently than any business would.  Say he paid too much for a house, he should do what he needs to do to get out of it just like Tishman did on their properties. 

 


Sure. But that does not mean that Lifeboy won't be the target of our derision, just like Tishman Speyer and Donald Trump.

Silver Regular Contributor
sfsfr
Posts: 688
Registered: ‎04-15-2012

Re: Refinance new home after shortsale of old

[ Edited ]

Michelle1x wrote:

I'm going to chime in a little here.  There is no reason for an individual to think of any financial transaction differently than any business would.  Say he paid too much for a house, he should do what he needs to do to get out of it just like Tishman did on their properties.  ITs just good business.

 

Why do you think he stuck it to the taxpayers?  The banks yes but why the taxpayers? 

 


Firstly, to say that you should cast morals aside, it's a dog-eat-dog world and we should encourage people to do what they can to get ahead, even at the expense of others, doesn't result in a civilized society.

 

He exploited a loophole in the system, IMO. He should not have been allowed to finance another house while short selling his current house as he was shown to be an irresponsible borrower. Also, how was he able to claim financial hardship to short sell his house while simultaneously buying another house? There was lying going on somewhere. Is lying just part of the game too and should be encouraged?

 

Secondly, the taxpayers foot the bill to bail out the banks, because the banks lost billions of dollars thanks to people like the OP.

 

Platinum Super Contributor
buyinghouse
Posts: 5,878
Registered: ‎04-23-2011
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Re: Refinance new home after shortsale of old

   I am out of words, this made me sick!:smileysad:

 

  But, not his fault though. As somebody said, he got a break using a loophole. And who is the one allowed him to do what he did? The same banks! Gee!

 

  Now, would you feel sick if I told you a guy, a broker, having tens of agents under his command was doing a short sale? And how proud he was of accomplishing such hard task?

 

  Like my mother in law keeps repeating and I hate it, "the end of this world is coming". I start to believe it seeing this. Dang!:smileysad:

 

  Sorry Lifeboy, it is what it is.

Visitor
Lifeboy
Posts: 5
Registered: ‎02-06-2013
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Re: Refinance new home after shortsale of old

yes people who did good business out of this that is getting rid of their loss property  ..

 

but no way we were getting refinancing on our existing home. There was no reward for being a good citizen. the govt plans or banks helping people were only for fannie/ freddie loans .

 

Ours was neither and down payment to refi was too hugh which we couldnt afford. So we bought a much lesser value property (we need to live some where and rent was coming to same price)..

 

Bottomline we tried for 2 years to refi but couldnt ....interest payment was itself becoming unaffordable ...

Silver Trusted Contributor
Michelle1x
Posts: 1,063
Registered: ‎02-17-2008
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Re: Refinance new home after shortsale of old

 

Secondly, the taxpayers foot the bill to bail out the banks, because the banks lost billions of dollars thanks to people like the OP.

 



Well the banks were given a GIFT of zero interest rates by Obama and Bernake in 2009 and they prudently passed on the savings to their best customers who were paying consistenly on their mortgages... right?  Since the banks refused to refi anybody in the 2009-2011 period, they were able to shore up their balance sheets and create some honkin executive bonuses so I think they were ok