Refinace based on asset na not credit score

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Refinace based on asset na not credit score

Alejandro Facio
Appleton WI / Elgin IL · Member since 2018 · 4 posts · 0 votes

Hello everyone,

I have heard in a previous podcast that there are lenders that can refi a rental based on the equity and income of rental and not so much on the credit score of the owner, Is this a myth or true and if so any recomendations?

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  • Jason Shackleton
    Investor · Ontario · Member since 2015 · 486 posts · 250 votes
    5y

    Hey @Alejandro Facio This is mostly true. Asset backed lenders are a thing. There are also some no doc lenders. They come with higher rates. Even some no doc lenders will still look at credit score however. 

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  • Ishmael Johnson
    New to Real Estate · NY · Member since 2020 · 196 posts · 29 votes
    5y

    @Alejandro Facio have you ever had any experience with no doc lenders ?

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  • Tarik Turner
    Lender · Hackensack, NJ · Member since 2016 · 1k+ posts · 372 votes
    5y

    Credit Score will almost always be taken into consideration. Lenders may have different credit score minimums and some may allow for more credit issues than others but I am not sure of any lenders that will not look at credit (especially on small to medium size deals and new investors)

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  • Alejandro Facio
    OP
    Appleton WI / Elgin IL · Member since 2018 · 4 posts · 0 votes
    5y

    Jason Shackleton

    Thanks, I have looked online for these lenders and found reaching them is (a person) very dificult and the ones who did do look at the credit score.

    Thank you again 

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  • Alejandro Facio
    OP
    Appleton WI / Elgin IL · Member since 2018 · 4 posts · 0 votes
    5y

    Ishmael Johnson 

    No, I have not I tried some of the lenders in this network and the same eighter no response or credit score is need at a certain number 

    Thank you for your input and help 

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  • Alejandro Facio
    OP
    Appleton WI / Elgin IL · Member since 2018 · 4 posts · 0 votes
    5y

    Tarik Turner, Yes Im getting the vive and response what you are saying is true.

    Thank you for your input.

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  • Matthew CrivelliBusiness Member
    Lender · MA · Member since 2021 · 1k+ posts · 1k+ votes
    5y

    Most of us are looking at credit. The reason being is credit is a good predictor whether or not a borrower will pay on the note. 
    If a borrower has recent judgments/ liens, late payments and such its a good indicator that they are not in position to take the loan.

    One way around the credit requirements is to add someone to the loan with a good credit history. This is easy to do and gives people with credit issues the ability to purchase or refi a property.

    [email protected]413-348-8346
    Freedom Capital Funding, LLC523 Reviews
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  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    5y

    @Alejandro Facio it is hard to separate the business from their owner, if the business is small. Once your business has a track record, it becomes easier to separate the two. 

    The reason is simple. Even if your rental property has plenty of income, there is no assurance you will pay the loan. If you have a history of neglecting on time payments, that implies disorganization or financial problems. Although the property secures the loan, the last think banks want to do is foreclose. It is expensive and unprofitable.

    Have you taken steps to get your personal credit in order? The first step is paying all bills on time. The next step is settling any collections, then start paying down revolving debt.

    It is very rare to find someone who manages their business any better than their personal finances.

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