Finance Structuring To Maximize Cashflow
Hi all,
I am not sure this is the right forum for this, but I was looking to get a little constructive criticism/advice on the following financial structuring:
Current home: Owe 209k, worth about 270k. Sell on 1 year L/O, with 9k down, payment of 1800, sale price of 300k. Take out 40k on a HEL for down payment on next home. Still have positive cashflow of about 200/mo. Appreciation rates are 12%-15%.
Future Home: Price: 230k, Mortgage of 180k.
Problems: Pushes my debt vs. income past 40. Will a No Doc Loan take care of this, and will I qualify? FICO score is past 750.
Pros: Kills the PMI on both properties, saving 200-300/mo (if I understand correctly that PMI is only necessary if the first mortgage is >80% LTV). I have positive cashflow on the current house and a lower mortgage payment for my personal residence in the future. Captures another 30k in equity for my current residence, and possibly carry back some financing after the sale.
Cons: I cannot see any. This is where I need my plan picked apart... 
Thanks in advance for any input on this!
It sounds like a good deal, But I would post it in the lease option forum to get your plan picked apart.
Good Luck,
Kyle
Sounds good to me too. Don’t forget about fee’s. They will be an additional out of pocket expense. Look for seller concessions of at least 3%.
680 is the minimum for stated income without going to a non-conventional lender. Expect an 1/8 to a 1/4 bump going stated.
As well, if you use 40k as a down on a 230k home the loan amount will be 190k not 180k. This would put you at 83% LTV. You would be in PMI for at least a year maybe even two. Unless you are putting 10k down in addition to the equity. Also remeber that the 40k should be seasoned.
Good luck!