These are interesting posts because they do not reflect my experience at all. Here (in CT) the local, small banks are very conservative with investors (other investorrs have had this response from banks too). We have done business in the main with large, national banks with branches here, and through mortgage brokers. Obviously, we have spent a little more money with the latter, but it has been worth it (the broker once said we could have 20 loans on properties, and then she would have to start looking for another bank). From one large national bank (Wachovia), we have taken four equity lines on properties–we can have a fifth, but it would have to be a “business loan.” In contrast to this treatment, I was once told to leave a small local bank by a loan officer. He then called my wife and told her we should not get into real estate because it was too risky (yes, 20 years ago, but still…). So from my perspective, I would say that you should get another broker. But then, things may be different where you are. Good luck, Gary
I had a mortgage lender tell me I shouldn’t have any more than 3 mortgages on my credit report at any one time. He said my debt-to-income ratio would be too high to qualify for any more. I was thinking that if I were selling on Lease/Option, that 75% of my rental income would offset my payments.
Anyone like to comment on this and share how many mortgages you currently have?
You simply rec’d “ONE persons opinion”. If I had a nickel… for each time I heard mtg brokers aspouse something that was not correct…
What you need to do is not be applying for mtg loans with mtg brokers, that are being underwritten on the same basis of qualifying as standard guidelines… 28/36, etc. What you should be doing is sitting down with a small bank, dealing exclusively with a comm’l loan officer, in a Bank that makes “Portfolio Loans”. This means that the guidelines are different, they will not be selling them to the secondary market and qualifying and reporting are considerably different.
Be prepared for a slightly higher rate, maybe 1% higher than what is available via a fully underwritten loan… but the convenience of not have to hoop-jump is well worth it. Some of these lenders report to credit bureaus and some don’t, but this won’t cause you the type of problems that you express concern over.
This is simply the step on the roadmap that you take to move toward managing your credit, while in the business of investment RE… If you try to do so in the manner that you mention above… your feet will be awfully sore… dancing to the beat of the wrong drummer…
Good question. However, I’m not sure a “right” number exists. Income, time on a job, credit score, relationship with the lending institution, other income, and the aggressive or passive nature of each lending relationship all would likely come into play.
Another way of looking at this is how many are YOU willing to have at one time? Trust me, you’ll likely know the answer better – and most likely – before any banker will.
Phil is absolutely correct? Once you have started to get established your best source of new money is a local bank that holds portfolio loans (kept in their bank not sold to secondary market, FHA etc.)
The issue for a lender not local to you is ?they can?t see the whites of your eyes? ? they have to base all decisions on a credit report, signed lease agreements and statistics. The concern is if you have several non-performing properties at the same time your in trouble.
Remember the saying ?If you owe the bank $100,000 and can?t pay ? Your in trouble. If you owe the bank $1,000,000.00 and can?t pay ? The Bank is In TROUBLE?!
Four mortgages in one?s name is the maximum comfort level for most lenders, even many private or secondary sources.
Re: how many mortgages do you currently have? - Posted by phil fernandez
Posted by phil fernandez on October 03, 2003 at 08:59:44:
I’ve got alot more than 3 mortgages. In fact I’ve got about 10 with the same lender, a small local bank. Try the smaller banks in your area. They often keep the mortgages in their portfollio.