Poll: Best places to get mortgages (credit union vs. big bank) and best approach to...

6 Replies

Hey BP,

FYI - New to posting, so let me know if I can do a search or if this is in the wrong forum section.

It seems like a no brainer - What is the best way to get mortgages? Have you found working with a local small community bank has been more successful over big banks? 

Reason: I am 25 years old with 2 rental properties (both currently being rented) and living at home. Both have been successfully rented out for $800 and $1000 for 2 years and it has been hard for me to qualify for ANY additional loans. I'm looking to continuing to snag additional property as I see fit but am running into this problem. 

Thank you all,

What type of loan?

Portfolio loans are usually better at banks, in general. Secondary market loans may be cheaper at a CU. I suggest you ask Realtors where the best place is for they type of loan you need: If you call one and say you're wanting to be pre-qualified by a good lender in your area they will likely head you to their favorite, so ask several.

You can also look at any institution's information and see their loan concentrations, residential and commercial, usually you can assume that the one generating the most loans in your area must have more experience. But, the biggest may not be the best in every situation, so shop around as to terms and rates offered.

Qualification requirements are standardized, there probably won't be much if any difference between institutions, especially with residential secondary market loans. If one tells you that you have some issue, others will too, so get that matter repaired and then try again. Good luck :)

@David Huynh

An investor friendly bank is going to be the most helpful to you. It may be on the national or local level. 

If you are running into this problem of not qualifying, what is the reasoning?

Are they counting your rental income? Some banks count the rental income right away and others make you have a two year history. If a lender is able to follow just Fannie Mae guidelines than you aren't required to have a two year history of rental income. 

Jerry Padilla, Lender in NY (#NMLS 1084877)

I have yet to to turn in a loan application but have ran into recent situation to obtain a personal loan 10k. It appears on paper that my debt to income is fairly high (they are NOT counting the rental income) so it seems that I have to continue my search to find an investor friendly or more experienced location. 

I am interested in obtaining an FHA loan or some type of "First time home buyer" for a personal residence w/ the potential to rent out rooms.


Condo 1 - Conventional loan

Condo 2 - Paid in full

Hey - you have equity! One thing I would take a look at is taking out a line of credit on Condo 2 before you become over leveraged with an FHA loan. How much is the county tax assessed value? Many banks will let you take out a secured line of credit on a property that you have equity in, and sometimes they'll give you up to the assessed value without needing to order an appraisal.

Advantages to having the LOC:

1. Low closing costs

2. Interest is only charged on the draws (vs mortgage that charges interest on the whole amount from the beginning)

3. If you pay it off, you can make another draw later - you could buy and sell multiple properties with one line of credit, one set of closing costs, only one credit check, etc.

County tax assessed value, I assume is property tax, $900/annual. 

It sounds like when the Condo 2 hits near the 18 month mark, I'll go ahead and try to pull a HELOC.

Another option is to look for private money sources near you.  They are generally higher interest but some will qualify you based on the property, not on your debt or income. It may be hard to find something that matches your needs, but nothing worthwhile is ever easy. 

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