How to acquire financing with a bank loan with a 30 year fixed

18 Replies

In all of my reading and listening to podcast/webinars I have not been able to figure out how to get a 30 year fixed rate loan thru bank financing. Is it possible to get a 30 year fixed loan without actually living in the home for the first year? I feel like this is not as complicated as I have made it. Do I just need to call enough lenders to find one that would lend on those terms?

I do know that when I form an LLC I can get commercial loans at 20 year amortization schedule and at year 5 year there is a ballon payment or the financial institution will evaluate the loan and rate and renew the loan.

Be kind to this newbie investor.

@Mary St.Clair

You can get 30 year fixed loans with relatively low interest rates easy until your total number of properties with mortgages gets to 10. Then you have to go to non conforming (non government backed), commercial, or private lending.

@Mary St.Clair

Yes ma'am, you'll get a little increase over the base rate for being an investment property, but it is going to cost significantly less than any other source of funding. (Other than family and friends that don't understand math). I'm sending you a private message with our primary loan originator's contact info. I'm pretty sure they lend in every state and they've been competitive every time we had someone else compete against them.

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@Mary St.Clair different lenders will offer different programs. Depending on the lender and the lending climate at the time you ask, you will get different answers. You need to always keep looking. In general 30 ear fixed for properties owned by an LLC will hard to find. LLC financing is generally harder to find and your best bet is usually smaller local banks. Ovoid large national banks.

One option is the newer hybrid lenders. People like Lima one and maybe lending one among others will offer 30 year fixed loans. 

If you want to hold the property in an LLC but still want to get conventional financing, then ask for a Fannie Mae loan. You have to close this loan in your personal name, but after closing, you are allowed to transfer the title to an LLC without it triggering the due on sale clause. This change was made in June 2016 by Fannie Mae to accommodate all those that were transferring to LLC's.

As far as portfolio loans in the name and title of an LLC, there are many that you can get 30 year fixed rates and pretty darn competitive rates all in all. You just need to connect with a lender that has the products and uses them regularly.

I hope this helps?

@Mary St.Clair

I think your questions have already been answered. But 100% you can get financing as an investment property that you will not occupy. You just have to understand that the interest rate will have a premium and there may be other underwriting requirements such as down payment that you will need to keep in mind. Typically, putting at least 25% down will yield you the best rate on an investment while limiting your reserve requirements. Talk to a local lender to get a better idea of what those requirements will be.

Good luck!

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@Mary St.Clair conventional banks will lend to a investment property under your name witch term should be favorable to you (if under 10 loans) or seek a commercial lender who specializes in investment properties and can close to a LLC.

@Mary St.Clair Hi Mary,

Even my Credit Union will let me have 30 Yr mtgs on rentals...

With them I can have 1 primary and 2 rentals (3 total) and rates are the same... No points or MTG INS and very low closing costs.

So if you're in a CU, Check it out!

Originally posted by @Lisa Hoover :

@Mary St.Clair Hi Mary,

Even my Credit Union will let me have 30 Yr mtgs on rentals...

With them I can have 1 primary and 2 rentals (3 total) and rates are the same... No points or MTG INS and very low closing costs.

So if you're in a CU, Check it out!

Yes credit unions can be good but just like every lender across the nation you gotta call and ask because your situation is never the same as someone elses. Lisa can get 30yr terms at her CU. My CU... 5yr ARM with 15yr Amortization. NO OTHER OPTION. Just an example of how different one lender is to the next.

I would set aside 2hrs to call at least 20 lenders and make a spreadsheet recording all the rates/terms/contact info for every lender you speak with. Make sure at least 5 of these lenders are local and smaller banks/credit unions.  

 

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