Skip to main content

Mortgage, refi, or delayed financing?

Hello, this is my first time posting to this subreddit and I’m hoping you very smart folks can advise me. (I've also posted this to r/personalfinance, but not receiving many replies there.)

My husband and I just had our offer accepted on a house in an extremely competitive HCOL market. Initially, we were planning to pay all-cash and then refinancing, but our accountant told us that we wouldn’t able to deduct mortgage interest payments from our taxes, so we switched to downpayment and traditional mortgage.

We were pre-approved for a jumbo mortgage with a large, national mortgage company, however when it came time to officially apply for the mortgage we were informed that because he is considered self-employed/contractor they would only be considering the three months he earned money in 2020 (he started in October 2020.)

He works for a startup in the EU and they are in the process of forming a C-Corp the US in order to pay him as a W2 employee. He’s been invoicing them every month and being paid via wire transfer since they have no ability to pay the required federal or state taxes. They consider him a FT employee and have set his salary. This was all explained to the mortgage company ahead of being pre-approved. We are now being told we can get a mortgage that’s $250k smaller than we wanted based on my income. (I admit this was our fault for not doing more thorough research ahead of this.)

We’ve paused the process with them and have started an application with a local credit union. The difference in assistance has been like night and day. The large mortgage company was recommended to us by our agent, but they’ve been less than helpful or thorough. Our local credit union has been fantastic thus far. She has answered all of our questions and concerns and has already written up an exception letter to give to the underwriter. Now, all that and it still may not matter. So, onto my questions.

​

  1. Do we just go with the smaller mortgage and pay a higher downpayment? We’d prefer not to do this, as we want to keep as much cash in reserve as possible.
  2. Do we pay all cash and then refinance? What are the implications on our taxes if we go this route?
  3. Do we try for delayed financing? Is there any difference between this and refinancing?

​

We are first time homeowners, so please be kind, we know we have not had an ideal process here. This whole affair has been stressful, rushed, and utter bananas. Thanks in advance!

submitted by /u/zootgirl
[link] [comments]

source https://www.reddit.com/r/RealEstate/comments/pf7z8u/mortgage_refi_or_delayed_financing/
Labels:

Comments

Post a Comment

Popular posts from this blog

North Carolina – “One to Buy; Two to Sell”

I realize I will likely have to contact a real estate attorney but also hoping to hear insights and experiences from others! I have a house in NC that I bought by myself in 2009, and paid off, in full, in 2022. I got married in 2023. My spouse and I have not lived in the house as our "marital residence". We have maintained separate residences even after we got married. (That a separate topic!). I am now selling this house. Realtors have told us that my husband has to sign the deed at time of transfer but I am not convinced since the house has not been our marital residence. The realtors like to use the phrase "one to buy; two to sell", which seems like a broad-stroke statement which is not applicable under all circumstances. And of course, the realtors don’t realize the details of my specific circumstances: I purchased and paid for the house in full prior to marriage Only my name is on the deed And most importantly, we have never lived in the house as a marit...
Post a Comment
Read more

Aren't comps/CMAs useless with buyer credits at close happening now?

I'm looking into buying a new construction townhouse in my HCOL US city. I'm seeing builders offering interest rate buydowns worth $20k-$60k on $800k homes (rather than just lowering prices) in order to keep their comps high for their other units, now that buyer demand has been declining. I asked my agent about these, and he said these buydowns aren't even the full story: buyers can write all kinds of other credits into an offer, like their closing costs, prepaid sewer fees, etc. Apparently cash buyers can just write in a "buyer credit at close" for any amount in their offer. So a new townhouse that appeared to sell for $800k in the MLS might have actually been a cash offer with a $100k+ buyer credit at close, meaning the buyer only spent $700k or less in total, but to the rest of the world they can only see the $800k! So that made me realize I can't trust comps/CMAs for other new construction townhouses. The sales prices could be way lower than they appear...
1 comment
Read more

Co-signing as non-primary resident - effect on size of required downpayment & first time home buyer status?

Contemplating co-signing on a house with my mom and splitting the mortgage payment. I currently have a significantly higher income and much better credit than her. I'm looking at potential home costs and related downpayments but have difficulty using some of the online estimators. From my perspective, this would be somewhat of an investment purchase (I intend to stay in my current location in a different state and contribute to the mortgage), however, for my mom, this would be a primary residence. For purposes of the downpayment size and the type of mortgage arrangement, would it be an investment property or a primary residence? Many thanks for any help. submitted by /u/piercalicious [link] [comments] source https://www.reddit.com/r/RealEstate/comments/km4hvl/cosigning_as_nonprimary_resident_effect_on_size/
Post a Comment
Read more