Hi all...This is my first post on the Bigger Pockets forum. I'm in the beginning process of seeking financing for a fourplex I would like to purchase. This will be my first investment property that I will have a mortgage. I have spoken with a few loan officers but more or less are getting the response of submit your documents and lets see. I feel I am a good candidate to be approved for the mortgage, but if not, I was looking for a loan officer that will be able to provide me with options or offer advice on the best strategy to get approved. Should I be asking certain questions? Do I keep contacting banks until I feel I have found the right one? Any advice would be greatly appreciated....thank you.
Get a referral for a mortgage broker and discuss your options with them. Instead of going through their system, you can see what's actually available to you.
Is there any reason why you think you'll get denied?
Hi Denise, welcome to bigger pockets. If you have good credit and income and not a lot of other debts, the financing shouldn't be a problem. They should be able to pre-approve you but for that they are definitely going to want paperwork. Is there some reason you don't want to give them that?
You can get together a package with your last two tax returns, bank/brokerage statements and w2s and that should give them most of what they need unless your financial picture is more complicated.
Thank you for your responses. I have a credit score of almost 800 a current mortgage on my primary home, car payment and I've co-signed on a student loan of $5000 for my daughter, but no other cc debt, etc. I can provide my last two tax returns which will show a much lower income than I am making now, so that could possibly be an issue, but I can also show current paystubs. This will be a joint effort with my husband, he has been at his job for 17 years.
With the property being a four unit, it should still qualify under Fannie Mae/Freddie Mac guidelines, which will probably offer you the lowest interest rate and the longest amortization term. I would recommend speaking with at least 2 reputable mortgage brokers who have experience with this product. Alternatively, if that doesn't work for you, a smaller community bank will be a good option. They can typically offer better "in house" loans for local investors like us but it will be a shorter term and probably a variable interest rate/balloon payment.
Hope this helps
the best advice I can give you would be to get pre qualified if your not approved for further action work backwards and achieve or receive the things the bank needs to get the mortgage btw I congratulate you on finding your first property and going multifamily I'm sure it's a great deal
Thank you Scott, thats great advice. I will continue my search.
@Denise Mawhinney Based on what you are stating, you should be fine on getting a loan. How much of a loan will be dependent on the income, debt and other factors. You are going to have to share the paper with a mortgage banker if you truly want to know how much you can borrow and look at the various options available to you.
Upen Patel, Mortgage Banker
Federal NMLS# 1374243
Thank you all for taking the time to give me your input, its all been very helpful. I look forward to the next steps.
Denise, that credit score will go a very long way from a bank's perspective so kudos to you for getting it up that high, FIS (Fair Isaac Score) is a lender's number 1 determination for a qualified candidate, after that your income and debt to income ratio, payment history, employment status, etc. will go into play. The great thing about working with a lender on a multifamily is it is an income producing asset, unlike a single family, so to them, this helps mitigates risk and banks are all about mitigating risk.
Also, you mentioned that the 2 prior year tax returns show lower income than you currently have now. Just tell them your story and explain what is going on especially if your income is projected to go up in the coming years compared to the 2 prior. Either way, having your husbands income will help give them security from an income standpoint and an additional guarantor.
Best of luck!
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