Mortgage for Rental

[Mark S.]

I've been talking to several banks about loan programs for rental property. Most require 15 to 25% down, which I expected. The thing I didn't expect, however, is that it seems that virtually all of them are looking at either a 3 or 5 year ARM, many with no cap after the fixed rate period is up. Anyone getting fixed mortgages on rentals right now. Maybe I'm just talking to the wrong people. Most of these banks are local or regional, where I expected to get an even better deal than from, say, a national bank. Thoughts?

[Chris Adams]

How many homes do you have currently? I believe the first 4 investment properties can be done thru conventional fixed rate mtg's.

I am putting together a deal with a small local bank right now, 5 yr ARM w 2/6 cap so i know its out there. Stay away from a no cap ARM. I called at least 20 banks and found 2 that had terms I was interested in.

Another thing I look for is banks that do portfolio loans. This means they don't sell the loans on the secondary market. Its my opinion this creates a better relationship between myself and the bank, I can get more flexible terms, and there underwriting guidelines are less stringent.