I was reminded today of a post from a while ago that talked about increasing your credit rating. You can read it here. The reason for that quick run down memory lane was to remind me that if investors did not start cleaning up their credit, then they will find it almost impossible to get a bank to loan them money. It takes several months of on-time payments to build that reputation you, as an investor, will desperately need. And now that we are in a financial crisis, created and owned by the banks, institutions are looking for every possible reason NOT to lend investors money for Real Estate.
But there is a bright side to this story. There is money available to qualified investors. I use the term “qualified” because that is the type of investor banks wish to work with. The 4 items listed here are the main attributes of a qualified investor that banks look for when you ask for a mortgage on an investment property.
* Credit scores of at least 720
* At least 20 percent equity – usually in the form of a down payment
* Relatively low debt versus household/business income
* Ongoing relationship with a loan officer
Pay special attention to the last bullet item. It is the relationship you build with the bank loan officer that will set you apart from your competition. Yes, you are competing for money from each institution you work with. Whether it is a small community bank or a large corporation, your chances of them saying ‘yes’ go up when they know you, know your family and friends as well as your business and business associates. Learn to close the deal with your lender as you would a property seller or buyer. Once you build a relationship, find out what they want and give it to them. Your paperwork will literally sail through the process. That way you get a speedy decision which will free up time to either make corrections and resubmit or close on a deal quicker than the other investors.
And like the post that talks about cleaning up your credit, it takes a little time. You can’t build a relationship over night. So do not expect to.
-Richard – www.TheFlipBoard.com
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