Conventional versus commercial

[Troy Forney]

I just got the go ahead from the commercial dept. of a local bank on a cash out refi.  When I cash out refi'd number 3 both a mortgage broker and local bank told me my debt to income was too high.  I went to Lima One capital.  They did it no problem.  Now I am wanting to cash out refi number 4, and the commercial dept. says looks good I don't see any problems.  I am having a hard time believing this.  Do they look at debt to income differently? Seem possible to all of you.  Anyone else have this experience with a commercial lender versus conventional?  

[Marty Johnston]

@Troy Forney,

Commercial lenders will look at your DTI differently than a conventional lender. In fact, every commercial lender might look at your DTI differently than another commercial lender even. Some of our commercial lenders will require less DTI than another, and some don't look at it at all. Some of our lenders are much more interested in the property, your FICO, experience, and the proposed use of your cashout refi funds than than your DTI. This is why often times, alot of investors have no choice BUT to go to a commercial lender because they do view the investor and the deal so very differently.

Sure, you may not have as low of rates as conventional, but there's a reason for that, and part of it is that the focus of the deal has shifted from things such as your DTI to the property itself: Is it sustainable for the mortgage, are YOU good for it and how? etc.

Commercial lenders can offer alot of complements to an investor that a conventional cannot, but some people can't move past the point that a conventional might be able to offer 4.5% while a commercial might be 6% or greater. Just my 0.02.

Marty