Q: Does anyone know of good places to get a 125% second mortgage without any questions. I would like to take the money and use it as a down payment on a second investment property. Any help anyone can give would be much appreciated.
A: If you are trying to find 125% mtg on a non-owner occupied property, good luck! It is simply too much risk for the banks to take! It will be much easier for you to find a 100% financing program for the new property. For this you have a couple options. Start with Entrust Mortgage, they are a pain in the butt to work with, and never close on time, but they do offer a great program... 100% bank financing on non-owner occupied properties up to 4 units. It is a two part loan, 80% 1st, 20% 2nd. One note on this program... The closing costs are running about 5 points, with maximum seller paid of 2 points. Which means you need 3 points to close.. The other option you have is to do a 100% CLTV program.. the bank will do the 1st mtg of 85-90%, and you get the seller to do the other 10-15%.. I usually get the best rates from sellers, but if need be you can find a private investor to do the 2nd. One of the best banks to use for this type of product is Finance America. The reason I like them is they use 90% of the rents for qualification, where most banks only use 70-75%. Please note this is not a "silent second" the bank knows about the second and is perfectly ok with it... Also, I want to mention that if you don't have any money to invest, be very careful. If you don't have any money, what are you going to do if the furnace goes out, or your tenants vacate? Always make sure you have some sort of reserve for every property you own! If you don't have one, create one with your offer. Legally, you can only get cash back for closing costs, and repairs. Pay an extra $10,000 for the property, then on an addendum State "seller to pay buyer $10,000 at closing for roof replacement." Use what ever repairs or replacements you can.. I usually use roof, or furnace replacement. That way you are better prepared for the unexpected.
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