looking for advice on a laon

4 Replies

Hi all,

first post on BP. 

I'm wondering how easy it would be to add partners on a loan one partner has been pre qualified for.

the situation is that we have 4 partners. One has been pre-qualified for enough to cover our first deal (150k range in Mass/RI). of the other partners one is in the army and will be deployed soon, another will be starting medical school in august and has no income, and I currently work under the table. We all have decent credit (700 fico range with no adverse credit events), would we have trouble adding these other partners to the loan, or qualifying as a group?

Any advice or experience would be much appreciated, Thank you.

-Peter

@Peter Radonich

Assuming you're seeking a standard investment property mortgage with a traditional bank (as opposed to commercial, which I'm not an expert in), adding other people on to a loan application is possible, but it's not always easy. The lender will want credit, income, and assets for everybody on the loan application, which can create a paperwork nightmare. 

The lender will also price the loan to the lowest credit scores of all applicants, which means you may get a less favorable deal than if the application had just the most creditworthy borrower on it. 

In today's lending world, it's better to keep things simple if you can. If you can go with less people on the application, it will be easier to get the loan done. 

@Mark F.

Thanks for the input, it's very useful. I'm thinking we could get the loan under the most credit worthy partner and carry the deal as a group (in terms of down payment and other current and future expenses). If you or anyone else has any experience with something like this, perhaps moving it Into a trust or transferring title to an llc, I'd be very interested in hearing about it. Also any experience people had with compensating one partner for carrying the loan or having a legal structure where all partners are responsible for the liability.

Thanks very much,

-Peter

@Peter Radonich

Even though it may be a pain, I would recommend everyone go on the loan, unless you are all very very trusting of each other. In a business relationship, things can go south real quick and partnerships break up or people get greedy. I am not saying it is going to happen.... Whoever is on the mortgage, is the only one responsible for paying it. Down payments, for investment properties can not be gifted. So all the money would have to come from who ever is on the loan. Everything is verified, while obtaining a loan. As far as title whoever is on title is a part owner, but not necessarily responsible for paying the mortgage as it isn't in their name.

Hey jerry Padilla do you do loans in CA for a residential house zoned commercial, burn down letter available

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you