Originally posted by @Antoine Pippens :
I’m finally starting to act on my first property I’m looking to house hack my first multi family. I’m looking for fha fixes rate loan with average credit so I can put down 0-10% down. My question is finding a mortgage broker or lending tree the best option for me? Or small community banks?
With Lendingtree, you'll get bombarded with calls and emails; uncomfortably so, even after you've closed months later.
I would start with a professional in the real estate business that you know and trust. If you don't know any, then go to REIA's or meetups and network. You'll find somebody, whether they are an investor or Realtor or a lender and ask them for recommendations. Once you get the recommendations, interview them all to see who you feel comfortable with. That goes for Realtors, lenders, insurance people and even title people if you can find them. Stress to the people you speak with that communication, good, bad and timely is important.
This is a very personal endeavor and you need to build your team around you to get your deal over the goal line.
The post above is spot-on about Lending Tree. Avoid submitting your contact info/ really any info to them, they sell their collected data on the back-end as "leads", you will receive plenty of unwanted calls.
To my knowledge, the only way to get a 0% down is as a Veteran. FHA will allow for low-down, but conventional has also opened up to low-down as well. I believe the lowest is 3.5% with conventional, 5% down with FHA. I could be wrong, it's been a while since I've worked on conforming loans.
I suggest reaching out to a Broker. You can absolutely call around to various lending institutions, but it will become extremely confusing and cumbersome as a borrower to navigate through loan programs seemingly to no end. Additionally, when you call a Quicken Loans yourself (for example), you're reaching their retail department vs. If i contact them as a broker on your behalf, I reach their wholesale department. Just as it sounds, better rates going wholesale.
FHA 203K is a great option, but it is extremely difficult to qualify for. Like, extremely difficult. HOWEVER, if you have the ability to do this, and the patience, you will obtain much better terms than going after a private-money rehab lender. Lower down, less reserves, better rates, better terms, all the good stuff.
yelp is a great tool to vet brokers/ other real estate professionals in your area, I would suggest starting there.
How many units is the property you are looking to buy? Do you know how much repair costs would be, approximately?
With the FHA 203k loan the down payment requirement is 3.5% and you can purchase up to a 4-unit. If you are looking at any multi-family of 5+ units then that would be commercial loan or hard money.
Conventional has a couple programs (one with Fannie Mae and one with Freddie Mac) that can do as little as 3% down depending on the circumstances and they also have a 5% down.
i've thought about using lending tree, and submitted my info before. my credit score is around 800 and i have good stable income, but my interest rate was something like 9%, which is ridiculous. if you have average credit, i'm sure you'll have double digit interest. I suppose if you can still get positive cashflow with that kind of interest its worth it, but I would never use it again.
It is essential when building your team that you include a mortgagee broker. They will do all the work for you in finding financing. Find a broker that you can develop a ongoing business relationship with.
typically the smaller mom and pop credit unions are easier to deal with and gave me better rates. if this is something you're thinking about pursuing long term starting a relationship with them would be my recommendation. a lot of times they have the latitude to do things the bigger banks don't want to deal with because they're smaller and have to fight for more business