Whats wrong here? ridiculous loans
Advice appriciated here. i currently own 11 properties, all rented and going well. I currently only have 6 mortgaes on these 11 properties (paid cash for several) just trying to add more. I recently sold one of my businesses and have well into 7 figures to invest. At this point being elected for pres. of the USA appears easier to achive than a 7th loan. I just dont get it.... im told by banks and lenders my credit score is too low, yet every time i inquire my credit is in the mid 700s... but again i have substaitial income, assests, cash on hand, and free & clear properties as collateral so the "inquiries or car trades" that temporaraily drops your score really shouldnt be an issue. i have zero bad credit.. i feel like its just excuses, i cant even use my credit card at the grocery store during underwiting. Im cleary doing something wrong or dealing with the wrong people. Thanks in advance, i'll hang up and read the comments.
Hi Gary,
Have you looked into a portfolio or single asset cash-out refinances with a private lender that offers business to business commercial loans? Often times that is a much easier route to go than traditional banks as the underwriting is more based on the assets than the individual. A debt service loan would require the rental income to be 1.1 or great of the PITI for the cash-out loan and the majority of programs require a 660 Fico or higher to qualify, although you may need a 720 for maximum leverage. Hope this helps. Thank you
You should be going to a portfolio lender instead of a bank. Banks are restrictive in their lending. Portfolio lenders are accustomed to lending to rental property investors and are truly only evaluating the asset.
Thank you both for responding, im looking into the advice you both just offered. Much appreciated.
Are you going to the wrong banks? Stay away from the nationwide branches. You need a small local lender that services their own loans and doesnt sell them on the secondary market.
A couple of opinions on this scenario would be best. As you already know, how they are underwriting your income whether it is from rentals or a job is going to be the key. But you are saying its because of credit score? a 700 plus credit score should have no issues getting financing with a conventional product with Fannie Mae/Freddie Mac guidelines. Reach out if you want to talk this thru. I would be happy to give some insight on anything that may be overlooked.
@Gary Singleton..seems like you have some good suggestions. I'd suggest you find a solid mortgage broker (full disclosure, I am one), that operates in your market and/or can do what you're asking them to do. Just going off your posting, it sounds like you should easily be qualifying for whatever loan, especially if it's only the 7th mortgage. If you need more help, or an opinion, drop a line. Thanks,
@David Kelly, The guy with bank im dealing with at the moment has mentioned this too, and really to be fair he comes across as quite knowlegeable, and a pretty likeable guy as well, so im not looking to trash the present bank im working with...im more wondering what "i" am doing wrong? ..The only issue i have with the bank is i was told with my assests, income, collateral, DTI, the property itself apprasing higher than selling price AND its already rented and cashflowing that this would be no problem... turns out theres alot of problems... UGH! credit score is always mid 700s except when lenders pull it, its always like 690 with them... NO bad credit, never a repo, never over 90, paid off over 50 car loans (etc) i guess i need to learn what the "system" is for better easier approvals, i know investors with way less assests and very little cash and have similar credit scores having no problems. I can pay cash for the house (nearly $400k) i just want to save my cash for more deals, i already paid cash for my last 3 properties because of the exact same issue.
@Gary Singleton there are too many factors that I and anyone else responding to this can't see to likely comment more on your posting. From the sounds of it, you shouldn't be a problem, even with your credit, ...it might have something to do with the lender and their own overlays (basically adjustment factors that you aren't aware of)...
I agree with Jared, it must be a lender overlay that is getting in the way. He may be knowledgeable, like many others but there are lenders that can only do so much. If credit, income, etc. is all in line then you need to reach out to another lender for another opinion on what exactly is the problem. It doesn't sound like you are getting the full explanation from your current lender. Fannie/Freddie play by the same rules with every lender, however, that lender can add additional overlays to make it harder to get a loan.
Quote from @Gary Singleton:
@David Kelly, The guy with bank im dealing with at the moment has mentioned this too, and really to be fair he comes across as quite knowlegeable, and a pretty likeable guy as well, so im not looking to trash the present bank im working with...im more wondering what "i" am doing wrong? ..The only issue i have with the bank is i was told with my assests, income, collateral, DTI, the property itself apprasing higher than selling price AND its already rented and cashflowing that this would be no problem... turns out theres alot of problems... UGH! credit score is always mid 700s except when lenders pull it, its always like 690 with them... NO bad credit, never a repo, never over 90, paid off over 50 car loans (etc) i guess i need to learn what the "system" is for better easier approvals, i know investors with way less assests and very little cash and have similar credit scores having no problems. I can pay cash for the house (nearly $400k) i just want to save my cash for more deals, i already paid cash for my last 3 properties because of the exact same issue.
The FICO below 720, paired with 7th financed property, is what's killing you for Fannie type financing. You can call another 100 banks, no one is going to do a fannie loan (which is where the best rates/terms/fees are to be found) if you don't meet fannie criteria.
https://selling-guide.fanniema...
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If the borrower is financing a second home or investment property that is underwritten through DU and the borrower will have one to six financed properties, Fannie Mae's standard eligibility policies apply (for example, LTV ratios and minimum credit scores). If the borrower will have seven to ten financed properties, the mortgage loan must have a minimum representative credit score of 720; all other standard eligibility policies apply.
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"Never over 90" is being read by me as meaning you have multiple 30 and 60 day late payments, the only other context I can imagine that quote being used in would be someone describing past romantic partners ("never over 90"), which I don't believe is the case here. High 600s is about what that translates to in terms of the specific FICO score algorithm used by mortgage lenders (which isn't the same as the credit card or car FICO algorithms, etc). So it checks out.
Having paid off 50 paid off car loans may be tripping you up here, both in terms of what's plainly written below, as well as the car loans having more 'weight' than other factors, just because there are so many of them.
https://www.myfico.com/credit-...
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Can Paying off Installment Loans Cause a FICO® Score To Drop?As the loan is paid down, the balance decreases which may have a positive impact on the score. However, analysis of credit data shows that having a low installment loan balance to loan amount ratio is even less risky than having no active installment loans at all. As a result, paying off the last of your active installment loans can result in a loss of points.
Note, even after a consumer has paid off their installment debt(s), it is still possible to have a very high FICO Score, by actively and responsibly managing other types of accounts.
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If you can afford to take out, and pay off, 50 different car loans, I wonder why you're even taking those loans out. Paying off that many car loans probably means you could just skip one car buying "cycle," save up instead, and from then on out just pay cash for all the cars.
And remember everyone, when it comes to both romantic partners and your credit history: "never over 90" :P
Hi @David Kelly thanks for the response. i guess the problem with a text forum is without tone & inflection things can be misunderstood.
i have only 1 blemimish on my credit period...1 over30 & it less than $100 (khols card my AP/AR department didnt know about). thats it, nothing more.
i used the term "no over 90" loosely. Im not using any trickery or deception in my words. The thought in my head is ive never even had a payment hit over 90... meaning that being the worst... and ive never even had that..
for example: "God for bid theres bankruptcies, repo's, judgements, leins, write offs..ive never even been over 90"
i hope that helps make sense.
For auto loans, ive owned a rather large service business for 25 years, i paid cash for many trucks but i financed a few too... aproximately 50. Bear in mind, i was focused on running a large service busines not the credit moves financing vehicles would look like... the fact paying off this many loans could negativly affect credit is assnine and the system needs to be adjusted.
I have paid cash for the past 5 deals. i have cash for maybe 6-or 7 more, however if i leverage debt @ 20% down i can obviously get more. just looking to pair with the right one.
Thank you all very much for chiming in. It looks like the common good advice is get all of my properties moved into my LLC ,.. which is already in process, just found a property in the interim i wanted to add. It looks like my options are pay cash or dont buy until that struckture is complete. Thank you again for all of your advice!
