There are a lot of specific questions being asked about specific FICO scores + specific finance options, but I was wondering if the experts could chime in with a straightforward chart as to general expectations and possibilities in whatever ranges you think are meaningful.
So, for example:
<500
501 → 600
601 → 700
701
etc, or whatever catagories you think are meaningful. Then suffix basic things that sort of score can do… like interest rates as compared to prime, LTV, etc.
So, for example, IS there a FICO score whereby a bank would give you 95/5 LTV on a commercial property? On a residential MFam? That sort of thing. This would be traditional financing and investment financing only… no hard money.
Any takers? I’ll promise anyone who answers completely, and is in the MA area, a nice lunch on me
Each lender has their own specific guideliines that they lend on. Most lenders cut for the conforming/ non-conforming is anywhere between 600-640 anything under 500 is Hard Money majority of the time. LTV has a major role in determining all of this too. Best advise is to check with multiple lenders with your individual loan senario then you’ll see the differences.
Well I don’t have a specific scenario, mate. I was interested in an analysis of how FICO slotted into the whole morass.
I realize that there are mitigating factors, but it doesn’t matter -exactly- how it all would produce a result. The idea is to explain the IDEA of how FICO relates to someone’s ability to get a loan, and how that influences LTV, SOLELY that. All other things being equal.
This might hinge into a double chart, or a discussion into how loan amounts relate to LTV. Loan types as well. Etc. So someone might say something like:
“For Commercial properties, if you have a FICO over 700 you probably will have no issue getting 90/10 LTV, assuming at least 50% of that DP is your own money” Totally just me making stuff up here, but you see what I mean! People constantly harp at the various LTV limits and then say things like “but your FICO will affect that”. So, people would like to know IS IT POSSIBLE to get 95/5 on a commercial property if (1) The thing will cashflow and (2) the debtor has greater than an XXX FICO? What is XXX then? Also, if it is possible, what range of FICO will give you that and what would the interest rates be?
You may just need to become a mortgage consultant to understand this.
What you’re asking for is indepth? There could be 1000’s of variances.
In my personal and professional opinion, an investor should be concentrating on working deals. Building a team of professional around them that are experts in their industries. This will help take this burdon of needing to understand everything off of them.
I’d love to claim that lunch from you, but as someone else said, it depends on what you’re trying to do. I think it’s probably pretty hard to find a commercial lender that will do over 90% LTV. I believe in commercial, the cash flow is more important than the FICO score although that is still a factor.
Fico is only a part of the total package. The other factors are the sale price/refinance amount, their assets, income, type of property and the LTV and then you call up various banks to see if they can do the loan and what their rates are. Could take a half hour to an hour to gather all that info, but then you can spit it out to the bank account reps in about a minute or just check the daily rate sheets.
It’s also hard to tie the fico to a specific LTV as each bank has their own guideline. Most of them are pretty close though.
