Questions for Lenders

[Billy Joseph]

Hi Guys,

I'm starting my vetting process of various mortgage lenders in my area. I have compiled a nice list of questions based on the article 7 Questions Real Estate Investors Should Ask When Selecting a Lender. Can you guys tell me if I'm missing any thing?

A little background, I'm considering an FHA 203(k) loan to buy an OO fourplex. This would be my very first property. I haven't found a property yet but I want to get an idea of my options. Is this to much to ask of lenders?

Thanks in advance BP members.

-Billy

1.What loan products do you offer for first time low-down payment owner occupied small multifamily homebuyer?

2.I'm considering the FHA 203K do you offer it or alternative products?

3.What are your terms:

a.Loan to value?

b.Interest rates?

c.Points upfront or periodically?

d.Qualifying ratios?

4.Are there any additional fees outside of interest and points? i.e. (“documentation fees,” “underwriting fees,” “legal fees,” etc.)

5.Are there any prepayment penalty?

6.What does your funding timeline look like? (How fast can you turn around a loan.)

7.How much are closing cost?

8.Do you pre-approve loans?

9.How quickly will the lender be able to process documentation and guarantee access to financing?

10.What are your loan and property criteria?

11.Do you only fund certain types of properties or certain geographic locations?

12.How do you calculate After Repair Value?

13.Which types of properties lenders are willing to lend on (single family, small multi-family, commercial, raw land, etc.), ?

14.Do you have any neighborhood or more specific location criteria?

15.Do you offer both recourse and non-recourse financing?

16.Do you provide funds for rehab costs?

17.What rehab costs the loan will cover?

18.How you must document and present the rehab process to the lender?

19.How involved they will be in the construction or rehab phase of the investment?

20.How knowledgeable are you on projects like the one I’m working on?

21.What are your cash reserve requirements?

22.How much if any will existing or potential rental income counts towards my qualifying ratios?

23.Do you offer graduated payment mortgage (GPM) options?

24.Are your products assumable?

25.Do you allow seller seconds?

26.Can you show me your rate sheets?

27.What is your yield spread premium (YSP)?