Questions for the bank

[Stephanie Birkhimer]

My boyfriend and I are going to the bank on Saturday to ask about financing options. We are planning to go about this individually because we have drastically different finances (income, debt, other expenses). In general, we're each just trying to find out what our budget would be to purchase a house to rent so that we can start looking for a specific property. Are there any questions that we should be sure to ask, or details we should look out for?

Thanks!

[Ann Bellamy]

A few things to consider before you jump:

Don't limit yourselves to banks, try mortgage companies also.  While the requirements will be pretty much the same if you are buying in your own name, (residential lending) you'll find different attitudes. 

And consider buying in the name of an LLC instead of your own name. In that case, you open up your options to properties that are not in perfect condition or fully rented. This would be a commercial loan, and sometimes a private loan. (non-institutional)

So when you talk to a person about a mortgage, ask also to speak to the commercial lending department, and ask the same questions.  I assure you the answers will be different.  Understand, however, that commercial lending is very different, so I'd do a search here on BP before you go.  Educate yourself.  

In addition, Black Diamond (url in my signature) is having a meeting on 1/27 on "Packaging your Commercial deal for the best rates, terms and sources of funds".  It is free, no selling speakers, and will be presented by a commercial mortgage broker.  It may be a little more than you are ready for, but education is always good.

You should be aware that commercial insurance and appraisals are more expensive, but there are reasons to insulate yourself in an LLC for liability purposes.