As I’ve hit the 4 property limit, I am seeking private financing for additional purchases.
In a few months I will be looking to refi my current properties that fall within my original set of 4. The concern I have is whether the loans through private financing will show up my on credit when I refi one of these 4 properties.
You must report mortgages that are not commercial; regardless if they show up on your perrsonal credit. If the loans are private you’ll need to know whether the individual has them as commercial or residential loans. If you have reported them to your loan officer on the application then it’s up to them to explain these to the lender. Keep in mind that there are special requirements and verifications for private loans.
Many mortgage professionals will take the easy way out and simply not require you to report them. Sometimes even the lender’s underwriter will say not to show them if they don’t show up on the credit. If this happens, I always get it in writing (email) that tihis was ok by them (lenders have different variations of conventional guidelines).
I would think that you’d have to disclose all mortgages/debts. But as long as you’re working within the lender’s requirements, you should be fine. You just want to make sure you’re commiting fraud. I think private lenders are more in tune to investor’s needs. I’m not sure how the terms would compare to conventional financing. What about doing a blanket mortgage?
This response is not correct. Just because something doesnt show up on the credit report doesnt necessarily mean that you dont have to report it to the conventional lender (broker) you’re working with. Even though it is a private loan if it’s in your personal name (rather than a business name) you must disclose this to the lender. If you’re working with a broker then it would be up to the broker to communicate this to the lender. Undewriting philosophies can be different from one underwriter to the next, even within the same bank. It may end up that the broker is told that the lender doesnt require this to be added to the application. The important part is that you make someone aware of this.
Private doesnt mean that it’s “confidential”; it means that it’s from the private sector (not conventional).