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Updated over 7 years ago, 04/04/2017
Lender not working with me
Good evening BP my name is Carlos Rodrigues and I'm currently looking to purchase a multi family in Elizabeth NJ. I was just under contract with a two family for $260k and I was able to pass under-writters and got the commitment letter from the bank. Unfortunately the contract fell through due to a oil tank underground. I'm now back to square one and I'm still looking to find properties 24/7.
I'm having a issue though. My lender only approved me for $250k on a two family property and I'm having a hard time finding properties for $250k in my area. I'd honestly feel like I would need to get pre approved for $300- $325k to find a good deal and in a better area of town. I tried to have my lender approve me for more money but he says I'm maxed out on what I can get a loan for. But when I first got my pre-approval for $250k it was for FHA 3.5% down. Now I'm willing to go up to $50k down and he still says I can't get more of a loan. He tells me to have someone co-sign, but i don't have anyone. I also asked him what if its 3 or 4 family wouldn't it count, and again I was told no. But if you realize I passed under writers for a $260k loan with 10% down FHA.
I'm not sure but something doesn't make sense. Can anyone guide me on this? I'd like to get a higher loan so I can purchase a multi family (2-4 units) already. I keep seeing deals and let them slip away because of <$50k.
Thank you kindly
What did the lender tell you is the factor preventing you from qualifying for more? They'll look at several factors including for Debt to Income Ratio, credit score, and such. Get an answer as to what is limiting you and check with multiple banks. If you repeatedly get the same answer, then you at least know what to expect and pursue another option such as a co-signer.
I'm going to have to schedule a one on one with my lender to better discuss. My debt to income is at 27% and I keep trying to bring it down, also my credit score is 753 currently.. And not to mention I received a 11% pay increase from my last pre-approval 5 months ago.. Don't know but I'm not sure if I'll be able to get a co-signer. I need a new lender maybe, any recommendations? Location Union NJ.
@Carlos Rodrigues this is where you need to be creative. Screw the bank. Have you looked at partnering with someone local to the area? Have you gone to local REI meetups? Why is this deal SO GREAT? What are the numbers? Have you created a presentation that shows the numbers and the ROI figures? Have those numbers been vetted by someone in the game? Whether you take the presentation to a partner/investor or the bank that at least shows them that you are on top of the deal. Also you seem so intent on getting in to the investment. What is your out? If someone was to invest with you how do you intend to cash them out of the deal?
@Sean PhillipsI couldn't agree more with screwing the bank! I haven't shown banks presentations and never though of doing so but I have show presentations to potential investors. I have been looking to partner up but I'm not sure how comfortable I feel unless its a experienced investor. I'm actually considering partnering with my parents, maybe having them lend me some cash but I can't seem to figure out a good way on how we could all win. I have to figure out a plan!!
Update: Found a new lender and pre-approved me for $300k on a multi and $370k on a three family.. Interesting I though..