Mortgage Broker/Lender vs Bank
I see a lot of posts suggesting contacting a bank for a cash out refi. What is the difference between a bank and a mortgage lender or is there a difference? When banks are mentioned in a post, does this include lenders?
Thanks in advance!
Debbie
OK, this is a serious question, if not a seriously stupid newbie question! I'm anxious to make my first deal. I plan to use a LOC. I don't know if I should go to the lender who closed my primary mortgage or to the bank where I've had a commercial account for years to refi. I'd rather look stupid here than when applying for a loan. So, answer my question, please!
Its only been 90 minutes, have just a little patience.
Since you already have relationships with those two banks, I would talk to them. Just ask if they do investor loans, and if so, under what terms. Bankers are in this business, so they're used to being asked such questions. If they say "yes", or more likely "yes, but...", you need to ask more questions, like about what rates, what qualifications, what sort of properties, seasoning, and the like.
A mortgage broker may be a better bet, since they will have a variety of products from different lenders. Quiz them, though about whether or not they really do investor loans. You want someone who does mostly investor loans, not someone who does mostly owner occupied and once in a while manages to close an investor loan.
OMG! I hope that didn't sound rude. I didn't mean to come across as impatient. I knew I should have added that smiley face. This forum is so informative and helpful I certainly don't want to get off on the wrong foot! :oops:
Thank you so much for the response, Wheatie. I'm going to look at my first potential property tomorrow.
It sounds like your plan is to buy with the LOC then refi. Be sure you have that all arranged ahead of time so there aren't too many surprises. There will still be some, but the better prepared you are the fewer you'll hit.
I'm a broker but often advocate using local banks. Especially over the last several months since we seem some huge changes in the financial industries.
You'll want the assistance of both a broker that specialize in investment loans and also local banks in your community. The best thing to do is have a consultation with them so they know what your goals are.
When you speak to the local banks make sure you are talking with the commercial (business) bankers. These types of loans can be made to a business entity so may also want to speak to someone about starting a LLC. Bank loans will cost less but have rates slightly higher than what a brokre can get. Most the times they're shorter than 30yr terms and have balloon notes (must refi every 3-5 years). Qualifications really depend on cash flow of the property. Wholesale lenders which brokers use will qualify you off credit, loan to value, employment/income history, and assets.
Keep asking questions!