Investor · Cohutta, GA · Member since 2015 · 8 posts · 2 votes
I have a couple of rental properties in Atlanta I am trying to get long term loans for and having trouble with conventional loans because I am self employed. I have one rental property in Chattanooga that I have purchased using my home equity line of credit from my primary residence. My credit is decent like 650-700 range, I have money to put down, its just finding the right place or the best way to get them financed, Does any one have any ideas or advice that migfh
Investor & Wholesaler · Chattanooga, TN · Member since 2014 · 41 posts · 14 votes
10y
@KANE WHITESIDE I would talk to @Jimmy Moncrief, he is a local portfolio lender and loves making loans. There are other portfolio lenders in town, any small/ local bank will have one. Being self employed is less of an issue as they are not securitizing and selling their loans (this is why you run into strict guidelines with larger banks). The big deal with being self employed is that they are going to look at your past 2-3 years of tax returns. Being a small business owner, they will look smaller than they actually are. But, these guys understand this and are equipped to deal with it.
Montgomery, AL · Member since 2015 · 109 posts · 11 votes
10y
It doesn’t matter how much you earn or how regular your income is: if you’re self-employed, that’s one more hoop you’ll need to jump through when applying for a home loan.
Your best bet will be to find a local bank that does their own portfolio loans. They basically make the loan and hold the loan while you pay for it. There are 2 basic types of loans that banks do:
1. Portfolio loans - The bank originates the loan and also services it for you. These are usually 1% or 2% higher interest rates than secondary market loans and have a term of 3 to 5 years with a 15/20 year amortization. The plus is since the bank will be holding this loan they can be more flexible with your self employed income and can be more creative in getting you a loan.
2. Secondary market loans - the bank helps you get all the paper work together and then immediately sells it off to investors. Fannie Mae, Freddie Mac type loans. They are more difficult to get but you get 30 year terms and lower interest rates.
Larger banks aren't going to be interested in doing these types of loans for you. So skip Bank of America, Wells Fargo, etc. Try the local community bank or credit union.
Lender · Nationwide Lender · Member since 2015 · 1k+ posts · 814 votes
10y
@KANE WHITESIDE You will need to be self-employed for at least 2 yrs before you will qualify for conventional loans. You can get a 30 yr fixed residential portfolio loan before that.
Find a lender that will look at your self-employed/business income to qualify you.
Investor & Wholesaler · Chattanooga, TN · Member since 2014 · 41 posts · 14 votes
10y
@KANE WHITESIDE I would talk to @Jimmy Moncrief, he is a local portfolio lender and loves making loans. There are other portfolio lenders in town, any small/ local bank will have one. Being self employed is less of an issue as they are not securitizing and selling their loans (this is why you run into strict guidelines with larger banks). The big deal with being self employed is that they are going to look at your past 2-3 years of tax returns. Being a small business owner, they will look smaller than they actually are. But, these guys understand this and are equipped to deal with it.
Ooltewah, TN · Member since 2015 · 55 posts · 10 votes
10y
I agree, you have gotten some great advice so far! @KANE WHITESIDE Great idea Luke Holcomb I would talk to @Jimmy Moncrief. I would add this is at least in part a numbers game, organize the information, Wright out your goals, pull your own credit score and take it with you otherwise they will want to pull it and if you don't move forward it reflects against you. call some local bank and credit unions, call Jimmy. As you can and sit down with them think of it as an interview just like a job, learn from the guys that say no and what you need to work with them in the future, plan so you can increase your options down the road and lower your borrowing costs. I have found, Cornerstone Community Bank, Northwest Georgia Bank, and TVCU to be investor friendly sometimes, it seems to depend some on who you talk to, some on quotas, and a lot on your relationship with them.
Investor · Cohutta, GA · Member since 2015 · 8 posts · 2 votes
10y
Wow thank you so much everyone for the great advice, that establishes a great starting point, I'm reorganizing all my information as we speak, I have pulled and printed my credit score to take with me, I m going through and writing out my goals once I'm finished organizing, Also studying up on the portfolio 30year fixed loans. I ve emailed Jimmy and contacted Richard. I'll keep you all posted on the results. Thank you Again