I stopped by a local bank today. They are offering a rate of 3.875% for investment property. I could save nearly $6000 per year simply by refinancing my rental properties at this rate. I had to ask the lady 3 times if that rate was correct, as the closing fees are simply a $250 appraisal and 1% of the total money loaned.
Things were looking great until she discovered that I own 5 properties. They are a Freddie Mac lender, so this puts me over the 4 property limit. (Fannie Mae will do 10, but I can’t get the 3.875 rate.)
Does anyone have any strategies for dealing with this situation? (Aside from selling one of the properties)
If you get commercial loans for a local bank that holds them for their own portfolio, the only limit is the bank saying they don’t want to give you any more loans.
I’m at 6 mortgages, and am trying to get it down to 4 so I can pull some cash out of my residence,I do not know this works, but am looking into moving 2 properties into LLC’s and put commercial loans on them,again, I am looking into this, but haven’t been able to confirm it will work, but based on some previous conversations, think it should work
Generally bankers are idiots. Print off pages 225-232 and take them in with you. The guidelines changed back to 10 financed properties and nobody seems to know. I had to highlight the section and take it with me and they called the underwriting hotline to double check.
Banks will loan on as many homes as you want as long as you can secure the loan so it will not be a possibly lost to the bank. Most investors will try to get homes with no money or very little money down which will scare the banks in this economy because the default rate is very high.
there are two different types of “loans”, there are conforming mortgages, which are up to 30 years, very low rate,this is what most people think of when they think of a mortgage, you can only have 10
,but yes, a bank can loan money on a house and hold the loan (portfolio loan), if you can get the bank to approve you for 100, you can have 100,but these loans will not have the terms of the 'conforming mortgages",they will only lock in the rate for a few years, and you will pay a higher interest rate.
If you have 2 conforming mortgages, but have 9 other loans on properties, and you are personally guaranteeing those loans, then you can’t get any additional 'conforming mortgages" even though you only have 2,of course you can get loans for these, but not Fannie/Freddie conforming mortgages