I am trying to refinance an investment property. I have been told that there is 90% investor financing on a refi by several lenders. Now when the paperwork is submitted to underwriting, they say the max in Texas is 85%.
What is the deal? I have great credit, proof of income and sufficient income.
What exactly is the problem? 85% of LTV is good. In fact, it’s more than is recommended by any professional investor that is actively working.
Most, including myself, never recommend borrowing more than 80%of the FMV (NOTE: that is current fair market value, not an inflated appraisal). The less %, the better. Why? because anything higher and you but yourself at risk should you ever have to sell quickly, not to mention that you’ll be hurting your cashflow by getting a higher loan.
The problem is not necessarily not getting 90%. I am just wondering why lenders tell you they can offer 90% investor refinancing and then afterwards say they can’t. I think that is what the marketing world calls bait and switch. I am fully aware of the implications of a 90% loan.
I am a loan officer, and I know some loan officers are like car salesmen giving the rest of us a bad image. Before I make any offer to a client, I don’t pull their scores. I take whatever information they have and run it into my loan program and then tell them what their options. I even try to do an estimate of closing costs so there are no really big surprises. The thing is, the more a client can put into the deal, the more commission the loan officer will make. Obviously, the person who offered you 90% and then switched to 85% is trying to improve is bottom line at your expense.
Lenders do not give a rate without knowing the credit score. It is always better to pull credit and use that to get preaaproved refinancing is a lot easier than purchase especially if the borrower has good mortgage repaymnet history. One can do 80% ltv with 580 fico (minimum) or 90% ltv on 620 fico investment refi in texas.
Again it depends on the lender
Well I am not going to jump to conclusion but there has to be more to the story?
I know that there are certian lenders that will loan at different LTV’s depending on the state.
I know this because I work in the national market and many times I have to always call my Reps with particular lenders and ask if there are differences in the states with the LTVs, it is all risk based and TEXAS is a very risky state in that if you make one mistake you will have to buy the whole loan back.
An other state that some lender lend less on is in Utah like with World Savings with investment properties in other states they will go as high as 80 and in Utah they will only go to 70% because of the High Bankruptsy and Forecloser state this is there own internal risk evaluation and how they want to play
I would also ask are they lowering your LTV due to your DEBT RATIOS?
Now just because one investor or lender is lowering your ltv to 85% just tell your broker to go to a different investor/lender
Are you working with a Broker that Specialises with investment loans?
Texas has installed funky caps on refinancing property. 85% LTV may be what the lender has capped you at due to whatever position the state of Texas has taken on allowing that particular lender to lend in that state. You need to do more research or go back to the original lona officer and discuss exactly what the issue is.