Calculating investment loan ratios involves a logic only Point would love. The REO rental properties must be filled in correctly for the ratios to calculate correctly. Here’s what you do:
1. Open the Borrower Information screen
2. Mark the file as an Investment
- Mark the appropriate Lien Pos
- Mark the appropriate Purpose of Loan
- Fill in the Purchase Price (if applicable), Loan Amount, Note Rate, and Term/Due
3. Click on the Investment button on the bottom of the Borrower Information screen.
4. Enter the Gross Rent and Occupancy Rate for the subject investment property.
5. Go to Loan Application Page 2.
6. In section V. MONTHLY INCOME AND COMBINED HOUSING EXPENSE INFORMATION, complete the following steps:
- Fill in the Gross Monthly Income for the Borrower and the Co-borrower (if applicable). DO NOT enter Net Rent – The subject property positive or negative cash flow has been calculated from the Investment button that you entered in step 3.
- In the Monthly Housing Expense(s) section, enter the payments for the primary residence in the Present column.
7. Go to Loan Application Page 3.
8. Scroll to the Liabilities section and enter all mortgages. Be sure that each mortgage is appropriately marked as an M in the R/L(I)/M field and the payment is in parenthesis.
9. Scroll to the Schedule of Real Estate Owned section and enter all properties the borrower owns
- For a refinance of an investment property, the subject property does not have to be the first entry in the REO section but it does need to have a check in the Subject Property indicator checkbox.
- For any investment properties in the REO section, enter an R in the S/PS/R field. Enter the Gross Rent, Mtg Payment, and Insurance/Taxes for the Net Rent to automatically calculate.
- If there is a second home, enter the total payment as a negative into the Net Rent field.