Lender questions to ask

Mortgage Brokers & Lenders
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Lender questions to ask

Praveen Kumar
Member since 2024 · 13 posts · 10 votes

Hi 

I am looking to buy first rental property and looking to speak with lenders. What are the questions that I should be asking lenders ? Any tips to get a better rate or deal from lender ? 

Thanks 

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Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
1y
Quote from @Praveen Kumar:

Hi 

I am looking to buy first rental property and looking to speak with lenders. What are the questions that I should be asking lenders ? Any tips to get a better rate or deal from lender ? 

Thanks 


 speaking with them does not get you a better deal. Credit score and downpayment get you the best deal. 

Questions are what type of loan are you targeting? You want a DSCR or an investment loan from a traditional bank. If a DSCR then questions are prepayment penalties and other terms of the loan so you understand what you are getting into.

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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    1y
    Quote from @Praveen Kumar:

    Hi 

    I am looking to buy first rental property and looking to speak with lenders. What are the questions that I should be asking lenders ? Any tips to get a better rate or deal from lender ? 

    Thanks 


     speaking with them does not get you a better deal. Credit score and downpayment get you the best deal. 

    Questions are what type of loan are you targeting? You want a DSCR or an investment loan from a traditional bank. If a DSCR then questions are prepayment penalties and other terms of the loan so you understand what you are getting into.

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  • Doug Smith
    Lender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
    1y

    The deals not going to get better because of the questions you ask, but we look for three main things from an investor: 1) Liquitity/Financial Assets, 2) A good credit score, and 3, and this is a big one, Experience. You'll want to take a spreadsheet and create a list of all properties you've purchased...particularly in the last 36 months and include the address, lender, purchase date, either rent you receive or disposition date, how much you sold it for, how much you rehabbed it, etc. You'll want to gather the last 2 or three months of COMPLETE bank and brokerage statements...even if you think we don't need to see it...give them to us. The more financial assets the better. Getting a lower rate will also depend on the amount you're putting down. Usually, we're looking at credit scores, Loan to Value Ratio,  & experience level, for the rates and terms. There's more to it than that, but have that ready when you speak to lenders. 

    0Reply
  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    1y
    Quote from @Praveen Kumar:

    Hi 

    I am looking to buy first rental property and looking to speak with lenders. What are the questions that I should be asking lenders ? Any tips to get a better rate or deal from lender ? 

    Thanks 


     Don't just solely base your decision on the rate and terms. You have to work with someone that is experienced and very active in the field. There are hundreds of lenders that you can choose from offering nice looking terms. Very few know what they are doing and can actually close on a loan. You will be surprised how many fall out deals I see from new and experienced investors that try to shop it based on rate and fees. 

    When interviewing prospective lenders I would discuss the following: 

    1. Ask questions about their lending guidelines/criteria. Be honest in what you are presenting to lenders and do not fluff values/not give the full story. Be very straightforward and transparent. 

    2. Ask about rate lock policies, all lender fees. 

    3. Ask about their reviews, do some research to see if they are actively closing transactions. 

    4. Ask about their specialties, what is their bread and butter program? 

    5. Ask for a rate sheet with par rate pricing if possible. 

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  • Praveen Kumar
    OP
    Member since 2024 · 13 posts · 10 votes
    1y

    Thanks a lot everyone this is all very useful information 

    0Reply
  • Jay HurstBusiness Member
    Lender · Dallas, TX · Member since 2017 · 1k+ posts · 1k+ votes
    1y
    Quote from @Praveen Kumar:

    Hi 

    I am looking to buy first rental property and looking to speak with lenders. What are the questions that I should be asking lenders ? Any tips to get a better rate or deal from lender ? 

    Thanks 


    Ask them if they have a NMLS number. if they do not they can only make a DSCR loan for you. Maybe that is your best route or maybe it is not, but if that is the only loan the LO you are talking to can make to you then guess what kind of loan they are going to suggest?

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  • Christian W Campos
    Lender · Member since 2022 · 24 posts · 6 votes
    1y

    You, the borrower, should know that the three major private/hard money loan requirements are credit score, reserves, and real estate experience.

    Just be aware of that.

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