Your best option is going to be bargining over fees. You should be able to get someone to do these loans for 1 point origination or less.
A lender has two options after they have originated a loan. Keep it (portfolio) or sell it. If they sell it, which most do, it’s the secondary market which determines that rate. Banks tend to have higher rates on thier portfolio loans, it just makes economic sense.
What it all boils down to is this. For the most part all lenders can offer you the same rates on an A paper loan because the secondary market is telling them the rate. Some lenders need the business more than others and these lenders will be willing to charge much less in origination.
Need re-financing for portfolio of SFH - Posted by BV, Tx
Posted by BV, Tx on February 20, 2006 at 13:55:36:
I am in the process of seeking out new “A” paper loans for part of my portfolio of properties. I need recommendations on the best way to find the lowest rates. Bank of America for instance offers rates in the 6 percentile with 2-3 point origination fees. I thought giving it to them unless there is something better out there. I need stated income, most are 80-90% LTV and will cash flow significantly once refied.
Thanks in advance
Please no solicitations from brokers just recommendations.
Could you deal with a single loan collateralized by the entire portfolio? Could you handle a 15 year amortization? if the answers are yes, read on:
I use Hibernia National Bank for my TX properties. If they like you and your portfolio, you may be able to get these terms: (a) 6.8%, (b) no points, (c) no PPP, (d) 15 year am, (e) 7 or 8 year balloon, (f) no title policies if loan is less than 250K–atty review is enough and costs a lot less, and (g) no appraisals required if loan is under 250K.
it may be in your interest to get appraisals, but you are allowed to go off of CAD assessed values if it serves your purposes.
They will go 80% LTV on the first deal. In time, as your relationship grows, you may be able to get them to go 90%.
Their underwriting gets tougher for loans over 250K. I keep my loans under that number.
Re: Need re-financing for portfolio of SFH - Posted by Ben Carmona
Posted by Ben Carmona on February 20, 2006 at 21:06:40:
Would love to help provide you with what you’re looking for but there are a lot of questions to be answered. You noted that you don’t want brokers soliciting you, who better though to help answer your questions than somebody experienced in financing investment properties. If you want a professional’s opinion it probably shouldn’t be done by “back and forth” questions over the forum.
Couple important factors.
The # of properties financed.
The length of time you have been managing these.
Many lenders limit themselves to 80% in TX, some will go to 90%
You want stated income but there was no mention of assets or credit scores.
Loan amounts
Your rate offered by BOA might not that bad if you’re in the low 6s. Obiviously for somebody holding properties long term, paying more in costs to get lower rates would be beneficial.
Re: Need re-financing for portfolio of SFH - Posted by Wayne-NC
Posted by Wayne-NC on February 20, 2006 at 15:58:25:
Two to 3 points? WOW! What does that make your APR? Compare that instead. Use a broker. Ask them about a blanket mortgage. This may be the simple obvious but all situations are different, so it is hard to recommend a specific program or company.