Re: Here’s a toughy for you ! - Posted by Dave T
Posted by Dave T on May 02, 1999 at 23:45:38:
I agree with all the comments below about the advantages of having separate mortgages.
If you attempt to go for separate mortgages from conventional lenders, you may be faced with underwriting guidelines that restrict the number of loans issued to a single investor. In my area, banks don’t want to make more than four loans to a single individual. Even Countrywide Home Loans has this rule.
This means that you will have to get several lenders involved and all of those loan applications have got to clear. I assume from your post that the seller is making you an all or nothing deal – buy all the properties or none, no partials will be considered.
If this is the case, contact the commercial loan officer at your smaller regional bank or S&L. These institutions often make “portfolio” loans. Ask the loan officer to consider 21 separate notes secured by a blanket mortgage. Also ask for a release clause in the mortgage that will permit you to sell an indiviudal property. If you get a release clause, the lender will want you to pay down the principal balance by some percentage of the total equity being released.
The commercial side may require more money down, than the residential mortgage side of the house. Additionally, they will have shorter amortization periods and a slightly higher interest rate.
Hope this gives you another avenue to explore, though less desirable than 21 separate mortgages.