Credit Score and options

Financing, Hard Money Lenders, Private Money
1

Hello,

Throwing this one out to see what peoples thoughts are. I have a mid score of 801, and looking at possibly buying a condo as a rental. I currently also own a SFR as a rental as well. Was curious how much negioating power I may have with lenders on interest rates on NOO real estate.

2

Your qualifying power will depend on your debt/income ratio…

3

zach is right.

Noawadays it is about risk assessment, not just credit score.

  1. For 100% programs (because of the risk), you are looking in the mid 7’s to mid 8’s. Rates are much lower for 90% or below.
  2. Can you service the debt. Can your income support the payment?
  3. Reserves. After closing, what do you have in the bank. Can the property support itself.

I hope this helps.

4

When it comes to negotiating power it comes down to who can get what your looking for and how much time you want to take to see who will give you the better deal. shopping your GFE could be helpful to get the best deal possible however finding a handful of good brokers/bankers to work with and sending them a loan scenario would be a good idea. you can get what you you pay for though. someone may give you a lower rate and not give excellent service or not close the deal on time or drop the ball during the loan process. is closing with ease more important than interest rates or just as important. if it is very important I would ask for referrals from my broker and follow up with asking them about there work load. can they handle the extra business? I would pay a little higher rate for great service but that’s just me. hope I answered your question.

5

Many people make the mistake of thinking the an 800 score opens up the doors to rates that don’t exist. For the most part lenders do not give any more weight to an 800 score than a 700 score.

No matter what your score is make sure that you are working with someone who is knowledgeable and trustworthy, if you do you will always come out on top.

6

4EEM,

I have that issue all the time. I hear “I have good credit, but no money, and no job, but I want a $200,000 loan at 5.55”. It cracks me up.

AK

Most lenders all go to the same place to get our money. So your negotiating power is in the fees not in the rate. Hope this helps.

7

I agree with the last two posts- all of us work with the same banks, so negotiation will help you a little, especially in fees, possibly in rate, but with everyone working with the same banks, the key is to find someone who is knowledgeable and trustworthy. Too many consumers who are shopping for a mortgage neglect this aspect of what mortgage brokers do and shop only the price. This is as much a service as it is a product, and working with someone who is skilled will save you money over the long term.