Infinite Investment Realty

The answer is yes you can, but it is a matter of finding a lender who offers the 5-10 properties program.

In 2009, Fannie Mae raised the maximum number of financed properties from 4 to 10. However, most lenders are not offering the 5-10 properties program, even though Fannie Mae says it will buy the loans. Here is why:

The underwriting of a 5-property-owning is hard work. Paperwork submissions with complex tax returns, rental properties, and other more detail to verify make it rather unattractive. It is no surprise that most banks don’t do it, but a few of the nation’s banks will. You just have to know where to find them.

In order to purchase and finance a home through Fannie Mae with more than 4 existing financed properties, investors must meet all of the following criteria:

•Own between 5-10 residential properties with financing attached
•Make a 25 percent downpayment on the property; 30 percent for 2-4 unit
•Minimum credit score of 720
•No mortgage lates within the last 12 months on any mortgage
•No bankruptcies or foreclosures in the last 7 years
•2 years of tax returns showing rental income from all rental properties
•6 months of PITI reserves on each of the financed properties

Call me at (408)-835-7743 if you have questions about mortgages with 5 or more properties financed.

California lawmakers extend a $10,000 tax credit to first-time buyers and those purchasing new homes or abandoned and foreclosed homes (none occupied homes).

Signed by Gov. Arnold Schwarzenegger this week, the new law provides $200 million for homes purchased between May 1 and Dec. 31 and between Dec. 31 and Aug. 1, 2011.

The funds will be allocated on a first-come-first-served basis. The credit is not a refund — like a federal incentive program for first-time home buyers that ends next month — but will result in a reduction or elimination of state taxes over a three-year period. There are no income limitations and buyers must reside in the home for at least two years.

I just refinanced 2 of my three investment properties. I pay the same mortgage but trimmed 6 years off of the previous mortgages. That is over $100K of saving per properties, and my payments to principles are increased monthly. So the question is, is refinancing your mortgage worth the cost?

There’s no hard-and-fast rule; it depends also on your balance. A 1 point drop on a $50,000 balance wouldn’t be as good as a half-point drop on $500,000.

What you really need to look at is how long it will take you to recoup your refinancing costs. These costs vary by lender and by the amount of your loan. Let’s say you got a $157,000 loan three years ago at 6.25 percent for 30 years. Your payment would be $967, and you’d have a balance of about $150,000.

If you refinanced that at 5 percent, your new payment would be $805. That would be a savings of $162 a month. If your closing costs were $3000, it would take you 15 months to recover your costs. Assuming you planned to be in the house for at least a little more than a year, the refinancing would be worth it.

Governor Schwarzenegger today announced his 2010 proposals for California. Included in the proposals is a recommendation to set aside $200 million for a new round of $10,000 state tax credits for first-time home buyers. The proposal expands upon the initial $10,000 state tax credit by including both new and existing homes. Last year’s tax credit applied only to new homes.

The tax credit could be combined with the recently extended and expanded federal tax credit for home buyers.

Merry Christmas to all and a prosperous New Year.