Converting Your Home to Rental Property
Converting your primary property into a rental property cannot be done on the spur of the moment, it requires planning and a cost benefit analysis
Assess the risk
May require another type of insurance
Repairs and/or Upgrades
Deciding What Will You Charge
Finding a Tenant
How to Get a Second VA Mortgage?
A Quick Guide to Understanding the Second VA Mortgage
The U.S. Department of Veterans Affairs backs VA mortgages also known as VA Loans for military families since 1944. A VA Mortgage helps families purchase single-family homes through private lenders.
There are a lot of misconceptions out there about the VA loan program or the VA Mortgage. Two of the most common are rooted in the concept of VA entitlement, which is basically the amount of money the agency guarantees they will pay back the bank in case if you foreclose or short sale the home. It is possible in certain cases to have 2 VA home loans at the same time. And you can definitely qualify for a VA Mortgage even if you defaulted on one in previous years.
Can You Have More than One VA Mortgage at one time?
What are the Advantages?
Types of VA Loans
How to Buy a Home with a Low or Zero Down Payment
The truth about no or low down payment mortgages
The HomeReady Mortgage Program
Acquiring a Private Mortgage Insurance
State and local home buyer programs
What are Mortgage Overlays?
Navigating the wide world of lender mortgage overlays
Specific Overlay Examples
We have put together a list of most common mortgage overlays in relation to the published mortgage guidelines.
- Debt to Income ratio – FHA set a maximum debt to income ratio of 56.9% for potential buyers with a minimum credit rank of 620. However, there are a few lenders that will not approve a mortgage unless the debt to income ratio is over 43%
- Minimum credit scores – While the FHA requires a minimum FICO score of 580 to qualify, the majority of lenders require a score of 600 or 620 or even 640 in order for them to consider the mortgage loan.
- Down Payment requirements – According to Fannie Mae and Freddie Mac’s guidelines borrowers need a 3% to 5% down payment in order to buy a house using a conventional mortgage. However, some lending institutions may increase the interest rate on the mortgage by 0.125% up to 0.50% or, they might require a bigger down payment if you have a credit score below 700.
- Bankruptcy requirements – If you have a prior bankruptcy, foreclosure, deed in lieu of foreclosure, and/or short sale, there are certain federal mandatory requirements for you to qualify for a mortgage loan. After a potential borrower is discharged from bankruptcy they may apply for a mortgage loan. However, most lending institutions ask customers to wait up to two years once the discharge is complete. There are different waiting periods for different types of loans.
Additional Common Overlays
- Property types – A veteran may use a VA mortgage to purchase almost any kind of property; however, some lenders do not offer a VA mortgage for a condo or a manufactured home. Some lenders won’t lend on condotels or timeshares at all. Or non-warrantable condominiums.
- Credit History – With limited credit history, it’s more difficult for lenders to determine a track record of how you handle credit. There are lender overlays in place that require a certain number of credit accounts and a minimum number of years of payment history in order to consider you for a loan.
Dealing with lender credit overlay when you are planning to purchase a house can be challenging. As each lending institution has a different set of credit overlays. To avoid shopping around contact Casey Moseman. She will find you a lender that perfectly matches your criteria. Here at, All Western Mortgage, we can help you shop around for multiple lenders at once, which will limit the amount of work you have to do.