Top Questions to Ask Lenders as an Investor

3 Replies

I recently started working as a buyer's agent for investors and I often get asked questions about lenders.  I compiled this list of questions to ask lenders when you are trying to find the best lender to work with.  I would love feedback about what other questions should be added to the list.  Also, hope these questions are helpful for some of you out there that are starting to interview lenders for the first time.  

Top Questions to Ask a Lender

  • 1.Do you work with investors?
  • 2.What down payment amount do I need?
  • 3.What interest rate will I pay?
  • 4.How many points will I pay?
  • 5.Is there a prepayment penalty?
  • 6.On average, how quickly are you closing loans?
  • 7.Can you give me a ballpark estimate of what to expect for closing costs?
  • 8.Do you work with investors that live outside your lending area as long as the property is local?
  • 9.Do you have any “in-house” or “portfolio” loan products?
  • 10.Do you lend on both SFR and Multifamily rentals?
  • 11.Do you loan on commercial properties (5+ units)?
  • 12.Explain the loan products you have available (ie. Term length of loan, interest rates, etc.).
  • 13.Do you offer any construction loan products?
  • 14.What are your seasoning requirements for refinance loans?
  • 15.If I paid cash for a house last month, fixed it up, rented it out, can I refinance it with you immediately?
  • 16.What is your “Loan-to-Value” on refinance loans?
  • 17.Are your refinance loans based on purchase price or appraisal price?
  • 18.If loans are based on purchase price, how much time would need to pass after sale before the loan would be based on the appraisal?
  • 19.What is your banks maximum lending limit or aggregate for any one investor?
  • 20.Do your 'in-house' loans get reported to the credit bureaus if under a business name (LLC, etc)?
  • 21.What is the maximum lending limit you can personally approve without taking it to the board or committee?
  • 22.How fast can turn around most refinance loans?

Again, I welcome your feedback.  What would you add to this list?

- "What loans does your lending institution prefer?"

- "What's your ideal candidate look like?"

- "You're paid in multiple ways? Which ways do you get paid and how much?" (in other words...give me transparency)

Samantha, 

A really great list. While I am a newbie, I do have a couple thoughts on your list:

2. I would revise the question to ask directly about LTV, unless working with a lender on a specific home.

9. I like the way you phrase question #9 to include in house or portfolio - this opens up the conversation to explore other products. 

14. Moreover, what are the seasoning requirements on conforming mortgages, as well as portfolio or non-conventional loans

17. Do you offer any products that lend on ARV versus purchase/appraisal price?

Agreed with Lucy, great list Samantha. Here are some additional questions to add...

  1. Can I roll closing costs into the loan?
  2. Can you extend the term of my loan?
  3. How important is my credit score?

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

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here