Author Topic: Where should I look for a mortgage loan?  (Read 2881 times)

Cwadda

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Where should I look for a mortgage loan?
« on: September 22, 2015, 04:08:28 PM »
Hi all,

I'm looking to buy my first rental property by early-mid next year. My parents and I renovated some condos and I will be buying one from them. My credit history is completely unblemished, but is only currently 740. I have 3 credit cards open now and hope to have a score of 760-780 by spring of next year. How should I go about getting a $100k loan if I'm still a student? Also, I already have a 20% down payment.

Thank you!!!

Cwadda

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Re: Where should I look for a mortgage loan?
« Reply #1 on: September 22, 2015, 08:27:54 PM »
Bump :)

Another Reader

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Re: Where should I look for a mortgage loan?
« Reply #2 on: September 22, 2015, 08:40:13 PM »
Investment properties are more complicated than owner occupied purchases.  Banks are hit and miss and may not offer the best deals.  Ask a knowledgeable local agent for a referral to a mortgage broker that handles them.  Or attend the local real estate investors association meeting and talk to people.  When you find someone that is knowledgeable and not set on selling you something, see if they can refer you to someone.

Gr8ful

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Re: Where should I look for a mortgage loan?
« Reply #3 on: September 22, 2015, 09:57:47 PM »
I second the broker route (I am a little biased).  They will have more options placing your loan.
Also look at local Credit Unions they might be more restrictive, but they sometimes offer great deals.

Asking around for referrals will make your search quick.

loyalreader

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Re: Where should I look for a mortgage loan?
« Reply #4 on: September 23, 2015, 09:25:45 AM »
I second looking at credit unions. I worked with a mortgage broker for my 1st two houses and felt good about the loans he helped me get. Used my credit union for my current house and... my broker couldn't get w/in a half point. Automatic withdraw from my savings account makes mortgage paying easy and helps me overpay towards principal (yeah... I'm one of those guys).

Cwadda

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Re: Where should I look for a mortgage loan?
« Reply #5 on: September 23, 2015, 12:17:01 PM »
Sweet deal, thanks! I'll check in with the Credit Union, which is currently giving my parents a great rate.

nereo

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Re: Where should I look for a mortgage loan?
« Reply #6 on: September 23, 2015, 12:34:09 PM »
Any chance you can live in the rental property?  If you reside in the property for 2 out of the first 5 years then it counts as a residence, and you can better rates.

Cwadda

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Re: Where should I look for a mortgage loan?
« Reply #7 on: September 23, 2015, 02:12:31 PM »
Any chance you can live in the rental property?  If you reside in the property for 2 out of the first 5 years then it counts as a residence, and you can better rates.

I won't be able to live in it for the first 2 years, but maybe 2 out of the 5 later on. Would I be able to refi once that happens?

Axecleaver

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Re: Where should I look for a mortgage loan?
« Reply #8 on: September 23, 2015, 02:22:10 PM »
I think the rule on "owner occupied" rates is about it being a "primary residence," which is defined as your home for more than 183 days a year (ie, more than half of the 365 days in a year). The two out of five rule relates to whether you get the capital gains exclusion. You should be able to refinance once you are living there and get a better rate, but then again, rates will presumably rise in the next two years.

Rental properties typically require a bigger down payment and have higher rates to reflect the higher risk banks assume you represent. You should shoot for a 30% down payment. The other option would be for your parents to hold the note for you for a couple of years, or to get the mortgage on better terms and have you assume the loan. They could also guarantee it for you if you have trouble qualifying.