OfflineI was speaking with a mortgage broker yesterday who told me that the institutions he has been working with are looking for 20 to 25% down on investment properties.
Was I just speaking with a really conservative broker? Is this typical in the market today?
I'd be interested in hearing what some more experienced investors have to say about this topic.
Thanks
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Very typical. 20% down for residential through Fannie or Freddie. 25% for commercial. Maybe 25% through some private investors.
The days of 125% loans for deadbeats and 95% loans for investors are LOOOOOONG gone.
Look for owner financing or private lenders.
All of my mortgage brokers want 20% down on conventional investment loans. To refy a loan requires minimum of six months seasoning. I had hoped that these restrictions would be relaxed, but it has not happened yet.
Al
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Seasoning is 6 months and not 3?? That is bad...
True most bankers and institutions are looking for large down payments re-finances are still happening without any seasoning at all (known as no season refinances). Most mortgage brokers are not familiar with doing this and many will tell you that you cannot do a refinance without 12 months seasoning.
I make this statement because I still, even now, will use no season refinances.
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That is EXCELLENT to hear!
My biggest concern is the large down payment. Do you have any experience with private lenders?
It looks like there are a lot of options out there. Can you tell me of anything to look out for? Questions to ask? etc?
I really appreciate your help!
steve
I'm a loan officer, and there are several programs out there. When you contact a mortgage brokerage 1st you need to find out what loans they offer. Smaller firms who are trying to stay out of risky loans offer the traditional 80%LTV (Loan to value) FHA gov't secured loans. Our office can do 3.5% down so basically 96.5%LTV. Basically if the mortgage brokerage offers residential/commercial jumbo..conventional...these are the guy you want to talk to. The more options a mortgage broker offers is indicative of the financial risk they are willing to take, and if you talk to mortgage brokerage with few programs you probably want to stay away from them in regards to seasoning.
I asked the same question to a few of my loan officers and it varied from 3/6/12 months....
Then talked to the CEO of the company and he asked me to show him file of any1 who wants to refi the house and he would consider the seasoning period on a case by case basis. Really it depends on who you talk to...try to talk the boss of the loan originator and then when that person comes on ask to speak to their boss. This guy knows how to make money and if the numbers look right there is now way he would turn down a revolving client
.......very much.
I really appreciate the input.
Yes it's true that you need 20%-25% down with a bank rental property loan. I talked with my bank and they not only said that but you needed a 720 score also. He said most of his investment business has dried up since the bank wants people only within those limits.
I find this one reason banks are in so much trouble not lending to people who have no trouble keeping up with their payments.