From the BiggerPockets Blog

 BiggerPockets Blog »

Jump to Forum View All

Click a category below to view different forum categories.

BiggerPockets

General Info

BiggerPockets Q&A, Site Questions, & Announcements

1525 topics, 14456 posts — Last Post 04/24/14, 05:44AM

BiggerPockets Exclusive PRO Area

117 topics, 841 posts — Last Post 04/23/14, 08:28AM

New Member Introductions

10986 topics, 86570 posts — Last Post 04/24/14, 05:32AM

Real Estate Success Stories

399 topics, 6213 posts — Last Post 04/24/14, 01:08AM

General Real Estate

General Real Estate

Buying & Selling Real Estate

5993 topics, 47218 posts — Last Post 04/24/14, 05:24AM

Renters

650 topics, 5861 posts — Last Post 04/23/14, 07:39PM

Get Foreclosure Help - Help Stop Foreclosure Forum

317 topics, 2561 posts — Last Post 04/23/14, 08:28PM

Home Owner Association (HOA) Issues & Problems Forum

238 topics, 1611 posts — Last Post 04/23/14, 04:02AM

Do it Yourself

658 topics, 6316 posts — Last Post 04/23/14, 09:50AM

Reviews & Feedback

Real Estate Deal Analysis and Advice

3709 topics, 29748 posts — Last Post 04/24/14, 05:51AM

Real Estate Guru, Book & Course Reviews and Discussions

1139 topics, 11600 posts — Last Post 04/24/14, 04:53AM

Ask About A Real Estate Company

743 topics, 7344 posts — Last Post 04/22/14, 11:25PM

Real Estate Investing

Real Estate Strategies

Wholesaling

5637 topics, 43962 posts — Last Post 04/24/14, 05:22AM

Rehabbing and House Flipping

3353 topics, 31105 posts — Last Post 04/24/14, 05:49AM

Real Estate Development & New Home Construction

554 topics, 4694 posts — Last Post 04/22/14, 09:17PM

Innovative Strategies

705 topics, 6044 posts — Last Post 04/22/14, 04:06PM

Tax Liens, Notes, Paper, & Cash Flows Discussion

867 topics, 6693 posts — Last Post 04/24/14, 03:16AM

Rent to Own a.k.a. Lease Purchase, Lease Options

699 topics, 4942 posts — Last Post 04/24/14, 05:49AM

1031 Exchanges

143 topics, 1062 posts — Last Post 04/22/14, 03:21PM

Foreclosure Investing

General Foreclosure & Pre-Foreclosure Forums

1691 topics, 11313 posts — Last Post 04/22/14, 09:26PM

HUD, VA, and Tax Sales

416 topics, 3103 posts — Last Post 04/23/14, 02:29PM

REOs

1217 topics, 10603 posts — Last Post 04/23/14, 08:46PM

Short Sales

1539 topics, 13154 posts — Last Post 04/23/14, 08:25PM

Landlord & Tenant Forums

Landlord & Rental Property Questions

7252 topics, 71193 posts — Last Post 04/24/14, 05:52AM

Mobile Homes & Mobile Home Park Investing

639 topics, 5146 posts — Last Post 04/24/14, 05:13AM

Investor Basics

Starting Out

7733 topics, 60690 posts — Last Post 04/24/14, 05:41AM

Investor Psychology

431 topics, 6107 posts — Last Post 04/20/14, 06:04AM

General Real Estate Investing

4730 topics, 37326 posts — Last Post 04/24/14, 02:18AM

Real Estate Investor Marketing

1738 topics, 14148 posts — Last Post 04/23/14, 08:20PM

Commercial Real Estate

Commercial Real Estate Investing Forum

1413 topics, 9013 posts — Last Post 04/24/14, 12:59AM

Multi-Family and Apartment Investing

1123 topics, 9396 posts — Last Post 04/24/14, 05:24AM

The Business of Real Estate

Real Estate Technology and the Internet

Real Estate Technology, Social Media & Blogging

645 topics, 4913 posts — Last Post 04/24/14, 05:42AM

Business Basics

Goals, Business Plans & Entities

833 topics, 7585 posts — Last Post 04/23/14, 08:58PM

Real Estate Finance & Legal

Financial, Tax, and Legal

Tax, Legal Issues, Contracts, Self-Directed IRA

2802 topics, 20136 posts — Last Post 04/23/14, 06:57PM

Property Insurance

311 topics, 2057 posts — Last Post 04/23/14, 01:20PM

Personal Finance Discussion

330 topics, 2754 posts — Last Post 04/22/14, 12:06PM

Loans, Mortgages, Credit Lines

Private & Conventional Lending Discussion

2852 topics, 19848 posts — Last Post 04/24/14, 02:50AM

Creative Real Estate Financing

1221 topics, 8860 posts — Last Post 04/24/14, 02:09AM

Crowdfunding Real Estate

35 topics, 463 posts — Last Post 04/19/14, 06:24PM

Real Estate Professionals

Real Estate Professionals

Real Estate Agents

1216 topics, 8025 posts — Last Post 04/24/14, 05:37AM

Bankers, Lenders, and Mortgage Brokers

442 topics, 1931 posts — Last Post 04/23/14, 09:04PM

Contractors

269 topics, 1690 posts — Last Post 04/22/14, 07:33AM

Local Real Estate

Local Real Estate

Local Real Estate Networking & Recommendations

2017 topics, 11758 posts — Last Post 04/23/14, 10:03PM

Americans & International Real Estate

162 topics, 572 posts — Last Post 04/24/14, 03:31AM

Foreigners Buying in the USA

62 topics, 409 posts — Last Post 04/10/14, 06:27AM

Canadian Real Estate

66 topics, 440 posts — Last Post 04/24/14, 05:54AM

Marketplace

Real Estate Marketplace

Real Estate Marketplace

15085 topics, 54135 posts — Last Post 04/24/14, 04:15AM

Real Estate Events and Happenings

168 topics, 2606 posts — Last Post 04/23/14, 10:05PM

Off-Topic

Off Topic

Off-Topic

2907 topics, 32446 posts — Last Post 04/24/14, 05:52AM

Housing News & Real Estate Market

920 topics, 8391 posts — Last Post 04/23/14, 02:43PM

BiggerPockets Real Estate Investing Summit

97 topics, 1752 posts — Last Post 04/23/14, 04:51AM

BiggerPockets Resources

Forums » Private & Conventional Lending Discussion » Request for Multi Unit Loan Advice & Credit Score Issue

Request for Multi Unit Loan Advice & Credit Score Issue

8 posts by 5 users

Signup

Excavaction Contractor · Rio Vista, California


Hello All! I’m brand new to this amazing site. To be honest I’m a novice. I look forward to gaining friends, learning & sharing.
My project is a property with 2 units on 1 parcel. My $145,000 offer was accepted. I'm having issues & was wandering if someone could help. I have $8,000 to put down.
FHA & USDA loan options were denied. I’ve found a credit union that will offer a conv. loan w/ 3% down. My credit is getting dinged because credit reports are pulled each time I inquired about loans. I would like to confirm/compare my rate, but don't want to keep getting my credit score lowered. Also, the credit union wants to charge an IR of 4.25%, which is almost a full percent more than the FHA/USDA. Any advice on if this is a decent rate? Any advice of where else to look for loans without lowering my credit report?
Any advice is appreciated.



Commercial Real Estate Broker · Canton, Georgia


Usually if you have multiple pulls for a home loan within a 2 week period then it counts as one pull. Are you going to be living in one side of the unit and renting out the other??

It sounds like you are going after and owner occupant loan and not an investor loan. If that's the case you must live their and will sign an affidavit stating such at closing with the lender.

They know buyers who are living in a property will fight hard to keep it in tough times which is why you have the better rate and less down than a investor loan.

The investor loan they want more down so the investor has skin in the game and it will be painful to walk away when things get tough. Lenders are just like insurance companies and they base metrics and requirements off of data and things they have learned from in failed ventures (loans) from the past. They set up requirements to minimize risk and increase the chances of a successful outcome with their loans.


Small_allworldrealtyJoel Owens, All World Realty
E-Mail: [email protected]
Telephone: 678-779-2798
Website: http://www.AWcommercial.com
www.AWcommercial.com 678-779-2798 [email protected]


Landlord · San Diego, California


Few things:

The less money you put down, the higher the interest rate that you can expect. 20% down is the standard these days so it's going to be tough to find a lender willing to accept anything less. On top of a higher interest rate, you can also expect to pay for Private Mortgage Insurance which may be another $100 to $200 or so. So 4.25% doesn't sound too bad. Consider yourself lucky that it's not 8%.

Getting your credit pulled shouldn't ding your credit score too much. Basically, you need to be above 720 for top tier credit. If your credit score came out below that then it's going to be tough going to find a bank willing to work with you on low money down. If you got pulled from 728 to 718, that's one thing. But if you went from 680 to 660, the problem isn't so much a little ding to your credit score as it is the fact that your credit score isn't what most lenders want to see.

Finally, echoing what Joel said, unless you're an owner-occupant, forget about borrowing from a traditional lender with less than 20%. You may find it to be more like 25% down.

The 5% down party crashed back in 2008. It's over. Nowadays banks want their full 20% down. FHA will do 3% down for owner-occupants but you've got to have a pretty sterling credit and income record. I recently received a 3% FHA loan but man, they put me through the ringer. They wanted documentation for every last thing - including invoices and sources of funds for every $1000 deposit over the prior three months. (Given that virtually all of my deposits are for in excess of that, we had to do a lot of digging.)



Excavaction Contractor · Rio Vista, California


John and Joel - you guys are a lot of help. Thank you! I had no idea this site could be so helpful. Just the info and experience I was hoping for. I do have a credit score in the mid 700's and the "dings" were not that substantial, but were noticed and each time the credit report got pulled the bureau that was issuing it was quick to point out that I had recently had my credit checked and frowned upon it. I'm glad to hear that it's not too big of a deal. And your guys assumption is correct! I will live in one of the 2 units. Again, you guys are very helpful.



· Pittsburgh, Pennsylvania


If you want to be able to compare multiple offers, rates and terms and perhaps using OPM other peoples money, you should consider working with a business/commercial loan broker. Often you can supply your own credit reports, which has no impact on your FICO score.



Excavaction Contractor · Rio Vista, California


Excellent advice Angela. I like that option. Thank you.



· Scottsdale, Arizona


Ryan,

Do you mind sharing why the FHA and USDA loans were denied? Your credit score doesn't seem to be the issue.

Thanks,



Excavaction Contractor · Rio Vista, California


Paul Cordero - Sorry for the late reply. The FHA method was denied because according to my Loan officer, there were no COMPS comparable rates in the area for two separate properties on the same parcel - plus 1 or the other multi units in the area was touching / not separated & the other multi unit was sold for $20,000 less. The USDA loan was not approved because the property had investment potential with the other unit and was therefore denied...now looking into other options since I only have about 15% to put down and not the full 20%....





Sign up