First Deal with Bank - So many hurdles - Other options

[Stephen Neto]

I just completed my first 3 family purchase with a mortgage broker my real estate agent recommended.  I was frustrated with all the financial documents they needed to see. Here I am putting down 25% of my money, have a great credit score of 780, have a job showing good income and yet they still want to see all my other financial documents. Now the loan is via Fannie Mae so i don't know if they are stricter than most?

But I have to believe there is an easier option to get financing on investment properties when you are a good risk. 

I was told to always use other peoples money to buy real estate, well that a what I was doing.  But is there another less annoying way?

Am I looking at the wrong types of banks or is this just part of the process for any business lending you money?

Also by looking into 5 units and above and going into the commercial loan side of things, will they have have document demands or do they mainly look at current rents coming in to the property?

I wish there was a webinar or such on all financing options for investment properties.

[Chris Mason]

Originally posted by @Stephen Neto:

I just completed my first 3 family purchase with a mortgage broker my real estate agent recommended.  I was frustrated with all the financial documents they needed to see. Here I am putting down 25% of my money, have a great credit score of 780, have a job showing good income and yet they still want to see all my other financial documents. Now the loan is via Fannie Mae so i don't know if they are stricter than most?

But I have to believe there is an easier option to get financing on investment properties when you are a good risk. 

I was told to always use other peoples money to buy real estate, well that a what I was doing.  But is there another less annoying way?

Am I looking at the wrong types of banks or is this just part of the process for any business lending you money?

Also by looking into 5 units and above and going into the commercial loan side of things, will they have have document demands or do they mainly look at current rents coming in to the property?

I wish there was a webinar or such on all financing options for investment properties.

 Assuming you don't care what the rate is or what fees are charged or if it's an adjustable rate mortgage, you can get a mortgage with way less paperwork in the future. Might be more challenging to cashflow with the rate 3% higher. 

For the good rate Agency 30YF stuff, we're still in a knee-jerk phase from NINJA loans of 2004-2007. The pendulum is in the exact opposite phase right now, for everything that didn't need to be verified at all in 2006, now it needs to be verified 3 different ways (80% of the paperwork required you actually didn't even see or provide because it was on the back end, a typical printed loan file is currently about 4 inches thick, compliance costs to originate a FNMA mortgage are about $4000 to $8000 depending on who you ask). The paperwork is redic, but the golden rule states that "she who has the gold makes the rules," and her name is Fannie Mae, and she's got that gov't subsidized 30YF interest rate that you find appealing. The process of courting Ms. Fannie Mae involves a lot of financial paperwork, as that is what woos Ms. Fannie Mae.