Investor · Lehigh Acres, FL · Member since 2013 · 94 posts · 11 votes
I have a private loan, 15%, on one of my homes that was cross collateralize with another home. This was supposed to be a short term, organize and get out. I am trying to refinance into a lower rate/term and I am having a very difficult time getting this done. Is there anyone out there that can offer any suggestions, a lender maybe that you have used that know what they are doing. I have gone through getting appraisals etc and my market (Lee County Florida) is doing very well so values are up but my lender is unable to get this done. Thank you.
Loan Officer / Processor / Life & Health Agent · Rancho Cucamonga, CA · Member since 2014 · 1k+ posts · 757 votes
10y
OK so if you were able to qualify for a 2 conventional loans you would be able to get 75% on each home if owned for more than 6 months.
That's 112,500 and 97,500 respectively based on the values you gave at 150k & 130k
The problem that you might have is that since it's a blanket loan, there's only one mortgage. But both homes have liens. You would need your current bank to send you 2 payoffs. This way you can refinance both homes concurrently and move forward.
As long as you don't have more than 6 mortgaged homes and you qualify based off of C.I.A. ( credit, income, assets ) this is a straight forward transaction. Also the homes need to be in your name for a conventional loan and you'll probably need to show a minimum of 6 months reserves. The reserves will depend on what DU or LP ask for.
Visalia-Fresno, CA · Member since 2009 · 1k+ posts · 863 votes
10y
I had to talk with about 40 lenders, meet with around 15 and submit personal information to about 10 banks before I could connect with 2 lenders to give me 20+ loans....
Rental Property Investor · Lindon, UT · Member since 2015 · 862 posts · 438 votes
10y
As @Shaun Weeks mentioned, the BP community would need more information about your loan parameters and reason for denial to be able to help. There are lenders from conventional to hard money reading these posts, but it is hard to know how to assist without a bunch more info.
Investor · Lehigh Acres, FL · Member since 2013 · 94 posts · 11 votes
10y
@Darren Eady what information do you need. I have a loan for a total of $190K across 2 homes. I had some personal issues at the time and went with a private loan. I contacted a bank who would not do it due the loan being tied togather. I have since then reached out to someone on BP who had me create a LLC, gave a preapproval, all docs requested, appraisals done and we have pretty much gone from one lender to another and its either, the rate was too high to the points was too much to you need to own your personal home to you need your husband on the note to you name it. I hate having to run my credit everytime and just needed some advice.
Rental Property Investor · Lindon, UT · Member since 2015 · 862 posts · 438 votes
10y
My suggestion is you have a frank discussion with the person who has been working on your loan and ask them if it is time to move to someone else. If they have really exhausted all of their avenues, they will let you know. They may even be able to take your file to another mortgage broker if they are done trying. Find someone in the area that has been in the business for awhile and is well connected. They may have options your current loan officer does not.
Investor · Lehigh Acres, FL · Member since 2013 · 94 posts · 11 votes
10y
Each home is work $150 and $130 from the appraisals done a week ago.
The credit issues were some cc late payments due to being out of work with illness for an extended period and being unable to stay ontop of payments. I have never been late on mortgages and this happened 3 years ago. I have since returned to work with a higher salary.
Flipper/Rehabber · Pittsburgh, PA · Member since 2014 · 144 posts · 21 votes
10y
The issue that remains is neither of those homes can carry $190,000 in debt on its own and no conventional lender will cross-collateralize as far as I know. It sounds like the broker's plan going in was to give you another hard money deal, but with a better rate. Does anyone on here know any lender with decent portfolio programs and rates that will perform this deal? I only know hard money lenders and private lenders who will cross-collateralize.
Each home is work $150 and $130 from the appraisals done a week ago.
The credit issues were some cc late payments due to being out of work with illness for an extended period and being unable to stay ontop of payments. I have never been late on mortgages and this happened 3 years ago. I have since returned to work with a higher salary.
Hi Andrea:
Ask your current mortgage broker whether he has any portfolio or jumbo lenders in his list of approved lenders that will allow cross-collateralization. If his answer is no, then you know that all that broker ever wanted to do was stick you in another hard money loan to buy you a little more time and make a fee. You may find that some lower rate lenders will do these types of combined deals, but most will not. If you need a new broker, go local and go reputable, and explain the ENTIRE situation up front.
Loan Officer / Processor / Life & Health Agent · Rancho Cucamonga, CA · Member since 2014 · 1k+ posts · 757 votes
10y
OK so if you were able to qualify for a 2 conventional loans you would be able to get 75% on each home if owned for more than 6 months.
That's 112,500 and 97,500 respectively based on the values you gave at 150k & 130k
The problem that you might have is that since it's a blanket loan, there's only one mortgage. But both homes have liens. You would need your current bank to send you 2 payoffs. This way you can refinance both homes concurrently and move forward.
As long as you don't have more than 6 mortgaged homes and you qualify based off of C.I.A. ( credit, income, assets ) this is a straight forward transaction. Also the homes need to be in your name for a conventional loan and you'll probably need to show a minimum of 6 months reserves. The reserves will depend on what DU or LP ask for.
Investor · Princeton, TX · Member since 2014 · 1k+ posts · 1k+ votes
10y
I think your first step should be to read your current loan documents. Then talk to the people that gave you that loan. They can tell what to do.
If the loan documents were drafted by a lawyer it should be clear if a partial release of collateral is possible. In the documents I have seen the payoffs would be preset based on a percentage of value at time of loan origination... OR based on new appraisals with approval of the lender.
So... I would talk to them about it. Of course expect every penny from any new loan to go directly from the title company to pay down your current loan. In some loans that would reduce your current payment. If you had that type of loan you would probably already know that.
Once the first house is done the second one should be easy.
PS I think it might be impossible to get two conventional loans if partial release of lien is impossible. As mentioned you would need two payoff statements. Both of them would need not to mention the other house.
Investor · Princeton, TX · Member since 2014 · 1k+ posts · 1k+ votes
10y
One more thought... look for another hard money lender to split the loan into two. Then get the conventional loans. The fees for that will not be cheap.
Rehabber · Smyrna, GA · Member since 2013 · 864 posts · 510 votes
10y
A few things. You first need to be in touch with your current lender and get an idea of what they care about. Some will do a partial release handily, some wont.
If its truly private, they should be real easy to work with.
Second, sounds like you are working with a traditional FHA/conventional loan guy, they are rarely good at doing things outside the box. Try hitting the secondary market. Give LimaOne a call and see if their rental30 would work. You'd be surprised at how much easier working with those guys is than traditional lenders. Costs a lot more, but if you cant get bank money, that or a commercial loan is where you need to be looking.
Are these things cash flowing? Cant imagine 15% making any sense at all on rental property, these weren't flips?
You'll pay higher closing costs with LimaOne, but you should be able to get that rate down around 8% pretty handily from what you described.
Rental Property Investor · Mankato, MN · Member since 2015 · 47 posts · 13 votes
10y
Its a longer term and more expensive play, but i think you may have to get a hard money lender to seperate this into two seperate loans against each property, and then down the line you can look at many different types of financing. I would suggest getting them out of the LLC and into your name until the dust settles and you have the debt where you want it.
The blanket mortgage you currently have eliminates anything i know of besides hard money and private.
Some of your small local banks and credit unions might consider a "commercial" loan with the two properties as collateral. Regs are a lot more restrictive if you go through the residential side of the bank but try talking to some commercial loan officers and they may be able to help you.
Real Estate Agent · Dover, OH · Member since 2015 · 4 posts · 1 vote
10y
Now I am not a banker but as far as your credit as long as the scores are pulled with in 30 days of each other it will not hit more than once as long as it is for the same reason. That's what the lenders have told me.