Mortgage loan for investment property with BoA

[2bor!2b]

Hi all,

We are first time home buyers looking to invest in an investment property in Texas. We live in CA and are looking for good lenders. So, far the lender with the lowest rate(at least among the popular ones) is Bank of America. However, they have extremely bad reviews for their home mortgage loans on creditkarma.com and consumeraffairs.com as well as other online sites. Are they really that bad? Anybody here have any experience with them?

We are new to the process of buying a house and any input will be helpful.

Thanks

[Mother Fussbudget]

Read the article onBigger Pockets regarding financing Investment Property.  After reading about their straight-shooter handling of loans, I closing this week on a refi for my primary residence mortgage with Pentagon Federal Credit Union.  So far they've been great to work with.  I started an on-line checking account with them based on my father's Navy service (70 years ago!) in WWII.

[Another Reader]

Have you identified what kind of property and where it will be located?  Do you have an agent there?  I would ask the agent and anyone you know that invests in the specific area for a referral to a mortgage broker or bank that does a good job on investment property loans.

[2bor!2b]

Have you identified what kind of property and where it will be located?  Do you have an agent there?  I would ask the agent and anyone you know that invests in the specific area for a referral to a mortgage broker or bank that does a good job on investment property loans.

Yes, it will be a single family home in Austin, Texas. We have a realtor we are working with. Never thought of asking him for a referral to a mortgage broker. Thanks.

[Another Reader]

The agent should have a few recommendations, if he works with investors.  The lender that is best with a local owner-occupant buyer might not be the best for an out of state investor.

I'm a little surprised you would consider Austin right now.  That's a very hot seller's market.  Will you be able to find a property that meets the one percent rule?  Have you done your homework on current rents?  A good loan won't overcome a deal that does not cash flow.

[iamlindoro]

I'm a little surprised you would consider Austin right now.  That's a very hot seller's market.  Will you be able to find a property that meets the one percent rule?  Have you done your homework on current rents?  A good loan won't overcome a deal that does not cash flow.

+1.  Why Austin?  Great town, but seemingly a poor investment at the moment.

[2bor!2b]

Yes, the property we are looking at satisfies the 1 percent rule based on the rent estimates we have.  The rental rate is obviously subject to market conditions, but as of now we are looking good.

I did some more research and got a better rate quote from Chase. We did have a recommendation for a private lender in Austin from our friend, but they do not work with first time home buyers.

[Bearded Man]

I've been a BoA customer for 20+ years. I've never had an issue with them, but...I've heard so many horror stories when it comes to loans and other things with them, that out of the four properties I own, three of which were financed, I skipped talking to them about a loan. Well, technically I did talk to a guy who I was referred to by a friend, but I still passed. Last I heard BoA has more complaints than all other banks COMBINED. Yes, they are large, but come on...

[SunshineGirl]

I have a loan with them that's never been a problem until last week when I got a notice from my insurance company that they were canceling my policy because they hadn't received payment, which BofA is supposed to do. I'm not sure if it's the insurance co's fault or BofA's, as my agent sold his business to another, and something might have gotten messed up there, but I was pretty mad.

[2bor!2b]

I've been a BoA customer for 20+ years. I've never had an issue with them, but...I've heard so many horror stories when it comes to loans and other things with them, that out of the four properties I own, three of which were financed, I skipped talking to them about a loan. Well, technically I did talk to a guy who I was referred to by a friend, but I still passed. Last I heard BoA has more complaints than all other banks COMBINED. Yes, they are large, but come on...

Where did you get the info about complaints?

[2bor!2b]

I have a loan with them that's never been a problem until last week when I got a notice from my insurance company that they were canceling my policy because they hadn't received payment, which BofA is supposed to do. I'm not sure if it's the insurance co's fault or BofA's, as my agent sold his business to another, and something might have gotten messed up there, but I was pretty mad.

Hmm...Looks like I need to steer clear of them. Thanks for the replies everyone.

[Bearded Man]

Doesn't the escrow company make the insurance and tax payments? I had a similar issue but it was a servicing company that dropped the ball and resulted in me having to pay out of pocket an extra payment directly to insurance and go through A LOT of hassle to get the other money back. I swear to God the servicing company is staffed by mentally retarded people, no joke, you should see some of the emails. I'm surprised they even figured out how to send email!

In answer to the other question, I read about it online, I don't keep a link for every article I read but you can google it.

[Axecleaver]

I've had two mortgages through B of A. Getting the last mortgage with them was a nightmare and I won't work with them again after that experience. Although, this was in 2010 not long after the subprime crash, so the rules were being rewritten as I was trying to close my loan. My hands were tied as I was working for a company who performed audits of the credit union I used, so I was not permitted to have accounts there while I worked in a management capacity for the audit firm. Really restricted my choices.

[SunshineGirl]

Doesn't the escrow company make the insurance and tax payments? I had a similar issue but it was a servicing company that dropped the ball and resulted in me having to pay out of pocket an extra payment directly to insurance and go through A LOT of hassle to get the other money back. I swear to God the servicing company is staffed by mentally retarded people, no joke, you should see some of the emails. I'm surprised they even figured out how to send email!

In answer to the other question, I read about it online, I don't keep a link for every article I read but you can google it.

Good question. All I know is I called my insurance people, and they figured it out in about two days. I wasn't happy with them in the first place because I felt they should never have sent a cancellation notice before trying to see what was going on. The insurance people called BofA, who at first couldn't even find a record of the loan, even though I was able to pull it up online. (WTF?) But after I provided my loan number to my agent, apparently the whole thing was straightened out. Maybe the agent was actually speaking with the escrow company? But no, because she confirmed the customer service number of B of A.