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Updated over 4 years ago,
advice on selecting a lender
My husband and I are hoping to buy our first rental property this year and plan on putting down 25 percent and getting a conventional 30 year investor loan. Any advice on choosing a lender? Best to go with the lender that provides the lowest interest rate? Or a lender that has a higher interest rate but owns their own rental properties? Thanks!
Originally posted by @Anna Ma:
My husband and I are hoping to buy our first rental property this year and plan on putting down 25 percent and getting a conventional 30 year investor loan. Any advice on choosing a lender? Best to go with the lender that provides the lowest interest rate? Or a lender that has a higher interest rate but owns their own rental properties? Thanks!
Hello Anna,
Great question! I always recommend beginning your journey by speaking with 2-3 lenders in your market.
An investor-friendly Agent in your market will always have solid recommendations but doing your own homework certainly doesn't hurt!
That being said, I suggest speaking with 2-3 lenders in your area. Being that you're using 20%+ as a DP, I'd recommend 1 of the "big banks" - Wells Fargo, Chase, etc. Smaller, local lenders are another great place to get pre-approved so that you can compare interest rates, projected closing costs, and projected monthly payment.
I don't think REI experience is something you should take into account when deciding which lender to choose but I'd be curious to hear what other BP members have to say on that topic.
Best of luck to you and your husband!
Abel
- Abel Curiel
Anna,
I'd go with the lower interest rate. If all things are equal, a bank is a bank.
In my case, I spoke with three different banks and it so happened the one with the lowest interest rate was also the one I liked working with the most.
On the other hand, one of the three banks failed to return my phone call for a week, and when the lender did reach out, he emailed instead of calling. Needless to say, I politely told him I required a faster response time than he had provided and let him know we would not be working together in the future.
If you have a similar situation where one banker brings a lot more to the transaction and a wealth of knowledge, then it may be worth paying a slightly higher interest for additional education.
Good luck!