Hi, I wanted to know if obtaining a home mortgage loan (1, 2, or more) will improve your credit, or FICO, score or will it have a negative impact for every investment property that I purchase with a mortgage loan?
Thanks,
PR
When it first hits your credit it may have a slightly negative impact, but after about a year assuming no late payments your credit should be better than ever.
Another area of concern over and above your credit score is your debt to income ratio.
As mortgages recorded on your credit report increase your indebteddness, lenders may discount your property rental income making your debt to income ratio appear higher. This could impact your ability to receive future mortgages or the best interest rate.
Jeff
The only impact is striclty DTI (Debt to income) after all your credit score is nothing more then a number to see how much you LOVE DEBT!!! I even ask investors look to work with us what’s your I LOVE DEBT SCORE. The key is to keep great track of your records and to remember that most bankers don’t know Much about money.
I like to think that my credit score wasn’t jeopardized because I only work with 2 brokers that know me and really understood my plan.
I told them that I didn’t want my credit to be checked each time and to just use the old report if they wanted my business…
I believe that there is a time frame of 30 or 60 days when using the report… I had to work really fast, but managed to close on 6 properties within 2 months.
I like what Bob Hope says about bank loans…
A bank is a place that will lend you money if you can prove that you don’t need it.
what is your secret to purchasing 6 properties in 2 mos.? Are they all in the same area? Did you have to put money down on all of them? I just dont understand how people do this. I JUST bought my first investment property Dec 2 & I want to purchase more but I dont have alot of money for the down payment. Please advise.
My secret…which really isn’t a secret…
is that I worked very hard since I was in my 20’s always working for myself while everyone else was partying…saved all my money…lived below my means, never paid interest on anything…owned everything free and clear…made goals once a year and stuck to them…sold my bonds and most of my stocks last year and used that money for down payments…
I am now retired for the second time…first at 40 years old…went back to work at 45 and just retired at 58…it takes hard work, discipline and sacrifice…
You must be willing to stay focused and have detailed goals both personally and in business. You must be diversified with all your holdings and educate yourself constantly…if you want something bad enough, you will get there if you are doing things for the right reason. Surround yourself with people who have integrity and who are wealthier than you are…you can’t learn from others who are struggling.
I currently own 2 houses in AZ, 5 in Texas and my home in SD for now.
You must have an exit plan in place and stick to your budget. You can’t listen to people who don’t understand your goals…you can do it …first educate yourself, ask a million questions, decide what is best for you in the place that you are in and you will succeed… Good luck
You are such an inspiration!! That is wonderful!! You are a very positive person! Thanks!!
K. Bradley
thats my plan… I want to start early, and save lots. I am 23 and have flipped one property, but I decided to buy and hold. So thats what I am doing… I think its all about education.
I would like to know how much your credit score drops after all 6 hit. I think its like 20 points for a normal house right? Even after a small loan like a car it drops some. What part of texas are you investing in? I live and work In Galveston…
Good for you to start early and understand the importance of saving! Yes, it’s all about education and patience.
I have also decided to hold off buying myself until I think the market is right again. I would buy more in TX, but I have enough there to keep an eye on for now.
I haven’t checked my score recently because it really doesn’t matter since I’m not getting any new loans anyway. As long as I continue to always pay all my bills on time, I should be OK.
I will let you know if it drops next time I check.
All I know is that I heard that Countrywide will only give you 4-5 loans max. They recently accepted my 6th open loan with them, so I must be doing something right.
I think it’s because they decided I was a good risk since I have never been late with payments.
I invested in 3 Austin homes with zips 78681, 78726 and 78754 and 2 in San Antonio with 78148 zip.
I deal exclusively with one Realtor that I love working with for my TX properties. Sometimes he brought deals to me with the tenants already in there!
If you are serious and can close a deal, contact him.
His name is Kenn Renner and his website is www.buyaustin.com
Tell him Linda in San Diego sent you…I trust his judgment completely because he really knows his market.
Good luck!
No worries I was not trying to steal you away from your realtor! I love austin too… If I were not in Galveston I would be there. Thanks for the contact. I will touch base with him and see if we could refer some deals back and forth. Thanks again!
Investing Lady
I am trying to start investing in San Diego. In your opinion do i have a chance? Is the market here to far gone?
Hi CV.
I am not qualified to answer that question because I don’t invest in SD other than own my home.
All I know is that we thought this house was overpriced in 1995 for 325k when we paid top dollar.
I bought out the ex for 567k in 2003 and it appraised at 800k this summer. I’m sure I couldn’t even get 700k if I had to sell right now.
But since I never plan on moving, I stripped the equity and used that for investing in higher interest notes until the market stabilizes.
There are a lot of great RE experts on this board that study the market and could advise you.
I am sure that there are still deals EVERYWHERE if you do the research.
Good luck and Happy New Year! 8)